India WT/TPR/S/249 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. During the period under review, India continued to streamline customs procedures and 
implement trade facilitation measures.  An elect ronic system for custom s clearance has been 
introduced, and a risk management system is also in place to selectively screen high and medium risk 
cargo for customs examination.  Despite these measures, India's import regime remains complex, especially its licensing and permit system, and its tari ff structure, which has multiple exemptions that 
vary according to product, user, or specific export promotion programme. 
2. India's tariff is announced in the annual Budget but individual tariff rates may be changed 
during the year.  In addition to the standard tariff rate, importers are required to pay an additional duty 
("countervailing duty") and a special additional dut y instead of local taxes.  To determine the 
"effective" applied tariff rate (i.e. basic duties and other customs duty) on a particular product, 
separate customs and excise tax schedules must be c onsulted, which adds to the complexity of the 
tariff.  India's tariff comprises mainly ad valorem  rates (some 94% of tariff lines), levied on the c.i.f. 
value of imports; and some alternate or specific du ties (6.1% of all tariff lines).  During the period 
under review, the average tariff rate declined:  th e simple average applied MFN tariff was 12% in 
2010/11, down from 15.1% in 2006/07.  This is reflected in a decrease in both agricultural and industrial average tariffs due to India's shift towards lower tariffs.  
3. Import restrictions may be imposed on grounds of, inter alia , health, safety, moral, and 
security reasons, and for self-sufficiency and balan ce-of-payments reasons.  India links the use of 
import restrictions and licensing, and other non-tari ff measures (NTMs) to domestic policies;  for 
example, NTMs are relaxed when imports are necessary to alleviate inflation or shortages.  State trading is also used as a policy tool, to ensure, inter alia , a "fair" return to farmers, food security, the 
supply of fertilizer to farmers, and the functioning of  domestic support price systems.  India is one of 
the most active users of anti-dumping measures am ong WTO Members.  Since its last Review in 
2007, India has also imposed several safeguard me asures.  As a result of an amendment of the 
legislation as of 2010, safeguard measures may al so take the form of quantitative restrictions. 
4. As in the case of imports, export prohibitions a nd restrictions are mainly in place to ensure 
domestic supply of specific goods and thus may be removed and applied as the circumstances require.  
In order to reduce the anti-export bias inherent in India's import and indirect tax regime, a number of duty remission and exemption schemes are in plac e to facilitate exports.  Tax holidays are also 
available to investors through the export- processing zones and export-oriented units. 
5. India grants direct and indirect assistance to  various sectors.  Most central government 
subsidies are destined for agriculture.  Other key s ubsidies include those for diesel and fertilizers.  The 
states provide additional subsidies, especially for basic services such as education and health, and 
electricity and water.  Price controls apply to so me commodities and are used as a means to provide 
subsidies to farmers and a population under the povert y line, and to ensure a "reasonable price" for 
quality drugs. 
6. Since its last Review, India has made several  amendments to its main competition policy 
legislation and the Competition Commission of In dia (CCI) created under the Competition Act 2002 
started operations in 2009.  In a ddition, some aspects of the law affecting mergers and acquisitions 
recently entered into force.  India became an  observer to the WTO Agreement on Government 
Procurement in February 2010.  Its procurement sy stem continues to be decentralized, comprising a 
multiplicity of entities at different levels of G overnment (including numerous central public-sector WT/TPR/S/249 Trade Policy Review 
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enterprises), and no common legislation governing procur ement.  Public procurement is considered as 
an important instrument of government policy and is used to obtain certain socio-economic 
objectives.  As a result, the Central Government has set reservations and price preferences as part of the procurement system.   However, competition fro m foreign suppliers is ordinarily allowed.  
7. India has made improvements in IPR enforcement through increased border protection, and 
its IP offices continued to pursue promising modernization efforts.  
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures 
(a) Registration and documentation 
8. Since its last Trade Policy Review in 2007, I ndia has continued the process of changing to 
paperless, electronic customs clearance.  Importers (Indians and foreign nationals), with a few exceptions, must register with the Directorate General of Foreign Trade (DGFT) and obtain an importer-exporter code (IEC) numbe r to be able to import commercially (Table AIII.1).
1  Since 2007, 
registration has been online, through applicati on and provision of supporting documents (e.g. bank 
certificate and income tax permanent number).2 
9. India has six regimes for entry of imports :  (a) imports for home consumption;  
(b) warehousing;  (c) transhipment;  (d) tran sit;  (e) re-importation;  and (f) imports for  special 
economic zones (SEZs).  For home consumption, importers may clear goods after payment of the 
duties and charges, or for warehousing without imme diate payment of duties.  Imports cleared for 
warehousing require a bill of entry, filed with all supporting documents as  required for goods for 
home consumption.  The duty payable is determined by Customs.  Duties are not paid at the time of 
warehousing but at the time of the ex-bond clearance, fo r which an ex-bond bill of entry is filed.  The 
final duty rate is determined when an import decl aration is presented for warehoused goods to be 
imported into the domestic tariff area (DTA).  Warehoused goods may be  moved from one warehouse 
to another without payment of tax es (included inter-state taxes).  In ter-state tax woul d be payable only 
if the movement from one warehouse to another en tailed an inter-state sale:  in this case, the 
transaction would be subject to sales tax,  entry tax (charged by some states3), and octroi if goods are 
sold to a warehouse located in the State of Maharashtr a.  In general, transhipment of containers at 
Indian ports is allowed without any examina tion by Customs.  Transhipped good require a 
transhipment bill of lading.4  Transit of goods through India is allowed without payment of duty and 
without examination by Customs, except if customs officials are informed of the possibility of illegal 
trade.  Goods exported from India may be re-imported within three years but there must be no change 
in the classification of the goods.  Re-imported goods  are subject to duties, except goods exported for 
repairs abroad5, for exhibitions, or as samples, which may be re-imported duty fr ee.  Special economic 
zones (SEZs) are deemed foreign territory for tr ade operations.  Imports into SEZs enter without 
                                                      
1 Foreign Trade (Development and Regulation) Act 1992, as amended by the Foreign Trade 
(Development and Regulation) Amendment Act 2010. 
2 An application in ANF (Aayaat Niryaat Form) 2A is required to register.  See Directorate General of 
Foreign Trade (DGFT) online informati on.  Viewed at:  http:dgft.gov.in. 
3 Entry tax on goods is levied in several states , including Jammu and Kash mir, Himachal Pradesh, 
Rajasthan, Uttar Pradesh, Uttaranchal, Haryana, Punj ab, Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, 
Bihar, Assam, Orissa, Arunachal Pradesh, Chhattisgarh, West Bengal, Maharashtra, Goa, Madhya Pradesh, and 
Gujarat. 
4 Customs Act 1962, Chapter VIII (Goods in Transit).   
5 In this case, duties are levied on the cost of  repair and insurance and freight (Jain, 2007). India WT/TPR/S/249 
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payment of taxes, duties or cess.  They are not su bject to customs examination at the port;  any 
required examination will take place at the zone. 
10. To clear goods for home consumption, importers must file a bill of entry, which may be 
processed manually or through the electronic data interchange (EDI) system.  Supporting documents 
(e.g. invoice, packing list, and bill of lading/airway b ill) must be filed along with the bill of entry if it 
is processed manually.  Import licences from the DG FT, and sanitary and phytosanitary certificates 
from the Ministry of Agriculture must be obtaine d prior to importation and submitted along with the 
customs declaration.  Additional documentation ma y also be required (e.g. a country of origin 
certificate) for goods imported under a preferential  trade agreement or under an export incentive 
scheme and qualifying for duty reductions  (section (iv)(e) and (3)(vii)(c)).6  The bill of entry may be 
filed prior to the arrival of the goods to allow for faster clearance, but no earlier than 30 days before 
the arrival date of the vessel or aircraft carrying the goods.7 
11. Importers that use the EDI system to clear imports are required to file a bill of entry in 
electronic format containing all the relevant in formation;  the supporting documents must be 
submitted when imports undergo physical examination.  EDI facilities are available at 92 customs 
offices.8  About 97.5% of all import documents are processed electronically;  about 0.67 million 
registered IEC holders use EDI facilities.9 
12. In 2005, India introduced a risk management system (RMS) as a measure of trade facilitation 
to selectively screen only high and medium risk cargo for customs examination.  The RMS consolidated the "green channel"  clearance facility and other fast-track facilities to clear goods.  The 
RMS for processing imports is operational at 48 custom s offices;  some 85% of India's imports are 
processed via this system.  In addition, importers  with a good track record and complying with 
qualifying criteria, are entitled to be accredited fo r special clearance procedures under the Accredited 
Client's Programme (ACP).
10  As at early 2011, 250 ACP importers are allowed to self-assess their 
consignments with no need for examination, in line with India's commitments to simplify and 
harmonize Customs' procedures under the revised Kyoto Convention.11 
13. Under the RMS, importers file an electronic bill of entry and the system indicates which 
import certificates, permits, or licences are required.  The RMS reviews the documents and provides one of four possible instructions for both ACP (if cargo is considered risky) and non-ACP importers:  
(a) imports may be discharged without further assessment  (i.e. of their classification, rate of duty or 
valuation) or examination;  (b) imports may be cl eared with no further assessment but subject to 
                                                      
6 WTO (2007). 
7 Department of Valuation online information, "Procedure for Clearance of Imported and Export 
Goods".  Viewed at:  http://www.dov.g ov.in/newsite3/clearance_procedure.asp. 
8 There are some 300 customs posts in India.  Accord ing to the authorities, posts that are not automated 
are mainly remote land stations where trade is almost nil. 
9 Information provided by the authorities. 
10 Qualifying criteria include, inter alia :  (i) the value of imports must be at least Rs 100 million or 
customs duties paid must be at least Rs 10 million, in a fi nancial year;  (ii) at least 25 bills of entry must have 
been submitted in a financial year;  (iii) there must be no case of tax violation during the last three financial 
years;  (iv) there must be no duty  demand pending on account of non-fulfi lment of export obligations;  and 
(iv) the importer must have a reliable system of record keeping and internal controls (Customs Circular 
No. 42/2005, 24 November 2005.  For Customs Notifications, Circulars, and Instructions, see Central Board of 
Excise and Customs online information.  Viewed at:  http://cbec.gov.in/cae1-english.htm). 
11 Customs Circulars Nos. 42/2005 and 43/2005, 24 November 2005;  and Chaturvedi (2009). WT/TPR/S/249 Trade Policy Review 
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examination;  (c) the release of imports requires further assessment but no examination;  or 
(d) imports must be assessed and examined.12 
14. Certificates of registration and import permits (e.g. certificates of origin, sanitary and 
phytosanitary certificates, and end-use certificates) is sued by different agencies, are required to import 
specific goods, in certain instances, depending on their end-use.13  These certificates must be 
submitted at the time of filing the bill of entry.  Under the Insecticides Act 1968, products that are 
included in the Schedule to the Act, that have not been registered in India as insecticides, must be 
imported on the basis of import pe rmit or end-use (no-objection) certificate for products used for 
non-insecticidal purpose (section (x)).  For instance, im ports of boric acid for insecticidal use must be 
registered with the Central Insecticides Board and Registration Committee (CIB & RC)14, as well as 
an import permit issued by the CIB & RC.15  However, in the case of imports of non-insecticidal boric 
acid the administrative ministry concerned (e.g. Minist ry of Agriculture) also has to issue an end-use 
(no-objection) certificate prior to the importation, to regulate its use.16  Without the no-objection 
certificate, which is issued only to end-users a nd not to importers in general, imports are not 
allowed.17  If these requirements are not fulfilled, imports are confiscated and the importer may be 
fined and/or imprisoned;  these measures are aimed at protecting public health.18  
15. For imports under duty exemptions and free-trad e zones schemes (section (3)(vii)), importers 
are required to "execute" a bond with Customs.  Th e bond is equal to the amount of payable duty on 
the imported goods.  If importers fail to fulfil the bond  conditions, usually related to the fulfilment of 
post-importation conditions, they must pay the duty levied on these imports along with interest rates 
at the applicable rate.19 
16. Customs clearance has been mo re efficient since 2007:  on average, import procedures are 
completed in 20 days (41 days in 2007), including  8 days for document preparation and 4 days for 
customs clearance and technical inspections.  The co st per container is US$960, including preparing 
documents (US$390) and clearing customs (US$120).20 The implementation of the EDI system in 
199421, and the RMS in 2005 at India's major customs offices, has helped to render border procedures 
more efficient.  EDI facilities have been extende d to 92 locations and all major customs ports.  The 
number of documents processed through the EDI incr eased from 3.2 million in 2008/09 to 8 million in 
2010/11 (as at December 2010).22 
                                                      
12 Customs Circular No. 43/2005, 24 November 2005. 
13 This is the case for imports of chemicals regulated by the Insecticides Act 1968. 
14 As at May 2011, 229 were insecticides registered under the Insecticides Act 1968, Section 9(3) 
(information provided by the authorities). 
15 Customs Circular No. 61/2004, 28 October 2004. 
16 WTO document G/LIC/Q/IND/12, 8 October 2008;  Customs Circular No. 61/2004, 
28 October 2004;  and DGFT Circular No. 16(RE-07)/2004-2009, 22 October 2007 (for DGFT Circulars, 
Notifications, and Public Notices, see Directorate General of Foreign Trade online information.  Viewed at:  
http://dgft.gov.in).  A no-objection certif icate is equivalent to an end-use certificate;  they are used to monitor 
the trade of certain highly-regulated products used in manufacturing. 
17 Information provided by the authorities. 
18 Customs Instruction No. 528/9/2004, 6 October 2006. 
19 Department of Valuation online information, "Procedure for Clearance of Imported and Export 
Goods".  Viewed at:  http://www.dov.g ov.in/newsite3/clearance_procedure.asp. 
20 World Bank/IFC Doing Business online information.  Viewed at:  http://www.doingbusiness.org. 
21 Comptroller and Auditor General of India (2002), Chapter 2:  Indian Customs:  Electronic Data 
Interchange System. 
22 Information provided by the authorities. India WT/TPR/S/249 
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17. If an importer is not satisfied with the assessment (i.e. the classification, rate of duty or 
valuation) by the customs officer, the importer ma y appeal against the "assessment order" (i.e. a 
decision made in writing by an officer).  No data  is collected on the number of appeals against 
"assessment orders". 
(b) Preshipment inspection 
18. Preshipment inspection for imports of certain goods has been mandatory since 2004.  Goods 
subject to preshipment inspection include unshr edded metallic waste and scrap (since 2004), and 
shredded metallic waste and scrap (since 2009) (Table III.1).23  Imports of unshredded metallic waste 
and scrap are permitted through 26 designated ports.  In spections ensure that consignments are free of 
arms, explosives, and radioactive-contaminated materials.24  Preshipment inspection certificates are 
issued by accredited certifying agencies located inside and outside India.25 
Table III.1 
Metallic waste and scrap subject to preshipment inspection, 2011  
ITC code Description 
7204.10.00 Waste and scrap of cast iron 
7204.21.90 Other 
7204.29.20 Of high speed steel 
7204.29.90 Other 
7204.30.00 Waste and scrap of tinned iron or steel 
7204.41.00 Turnings, shavings, chips, milling waste, saw dust, fillings, trimmings and stampings, whether or not in bundles 
7204.49.00 Other 
7204.50.00 Remelting scrap ingots 
7404.00.10 Copper scrap 
7404.00.22 Brass scrap 
7503.00.10 Nickel scrap 
7602.00.10 Aluminium scrap 
7902.00.10 Zinc scrap 
8002.00.10 Tin scrap 
8104.20.10 Magnesium scrap 
Source:  Department of Commerce (2010), Handbook of Procedures 2009-2014 , Vol. I, incorporating Annual Supplement, 
23 August.  Viewed at:  http://dgft.gov. in.  
19. Imports of certain types of second-hand and def ective steel products, as well as textiles and 
clothing articles are subject to preshipment  inspection on safety and health grounds. 
(ii) Customs valuation and clearance 
20. The Customs Act 1962 (Section 14), the Customs Valuation (Determination of Price of 
Imported Goods) Rules 1988, its amendments, and the Finance Act 2007 regulate customs valuation 
in India.  The latest amendments to custom s valuation legislation entered into force on 
10 October 2007.26  Under Customs Notification No. 93/2007, Section 14 of the Customs Act was 
substituted by Section 95 of the Finance Act 2007.  The amended section stipulates that the 
                                                      
23 DGFT Public Notices Nos. 16/2004-09, 15 October 2004;  and 163(RE-2008)/2004-2009, 
23 March 2009.   
24 Department of Commerce (2010b).  Checking for excess radiation levels has been mandatory since 
2009 (DGFT Public Notice No. 17/2009-2014, 13 November 2009). 
25 WTO (2007). 
26 Customs Circular No. 38/2007, 9 October 2007;  and Customs Notifications Nos. 93/2007 and 
94/2007, 13 September 2007.   WT/TPR/S/249 Trade Policy Review 
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determination of value of imports should be based on the transaction value, i.e. "the price actually 
paid or payable for the goods when sold for export to India", including any amount paid or payable for costs and services (e.g. commissions and broke rage, royalties and licence fees, transport and 
insurance costs, and handling charges).  The calcula tion is based on the exchange rate in force when 
the bill of entry is presented to Customs.  For goods sold on "high-seas" sale contracts, the price paid 
by the last buyer constitutes the transaction value.
27  The transaction value method may be rejected if 
"reasonable doubt" arises on the accuracy of the declared value.28  There are six circumstances under 
which a customs officer may raise reasonable doubt.29  Raising reasonable doubt does not lead to an 
upfront rejection of the import value presented, which, if justified by the importer, is accepted.  If the 
transaction value is not used, the value is determined  according to other methods, in sequential order:  
transaction value of identical goods;  transaction valu e of similar goods;  deductive value;  computed 
value;  and residual method.30  The Rules 2007 also clarify that royalties and licence fees must be 
included in the transaction value, if not included in the price actually paid or payable (Rule 10(1));  and the transport cost includes the ship demurrage charges on charted vessels, and lighterage or barge 
charges (Rule 10(2)). 
21. A landing charge (for loading, unloading, and handli ng) of 1% of the c.i.f. value is added to 
the c.i.f. value, to calculate the transact ion value (earlier known as "assessable value").
31 
22. The Central Board of Excise and Customs is authorized, by notification in the Gazette of 
India , to fix "tariff values" (reference prices)  for any type of imported (exported) good.32  At present, 
India uses "tariff values" to calculate customs duty applicable on imports of, inter alia , palm oil and 
palmolein oil (crude and RBD), as well as crude soybean oil,  poppy seeds, and brass scrap.33  
According to the authorities, "tariff values" are revi sed every two weeks and are adjusted to align with 
international market prices;  however, "tariff values" for edible oil remain unchanged since 2006 
(Table III.2). 
23. Importers may file an appeal against customs decisions on valuation matters to the Appeals 
Commissioner or the Customs, Excise, and Serv ice Tax Appellate Tribunal (Customs Act 1962, 
Sections 128-129).34  No data are collected on the number of appeals. 
                                                      
27 "High-seas" sale is a sale carried out while goods are still at sea or after dispatch from the 
port/airport of origin and before arrival at the port/airport of destination.  See also Customs Circular 
No. 11/2010, 3 June 2010. 
28 Customs Valuation (Determination of Value of Imported Goods) Rules 2007, Section 12.   
29 These circumstances are:  (a) a significantly higher  value at which identical or similar imports at (or 
about) the same time, in comparable quantities and compar able commercial transaction, were assessed;  (b) the 
sale value involves an abnormal discount/reduction from the ordinary competitive price;  (c) the sale involves 
special discounts limited to exclusive ag ents;  (d) there are mistakes in the d eclaration of goods, e.g. description, 
quality, quantity, country of origin, and year of manufac ture or production;  (e) the import declaration is 
incomplete, e.g. lack of brand, grade, and any other specification that could have a bearing on assessing the 
value of the goods;  and (f) fraudulent manipulation of documents. 
30 For details, see Customs Valuation (Determination of Value of Imported Goods) Rules 2007,  
Sections 4-9.  The amended Rules introduced a proviso under Sections 4, 5, and 9. 
31 Updates on Indian Taxation and Corporate Laws online information, "Value for Imports".  Viewed 
at:  http://www.dateyvs.com/custom02;  and Central Exci se Madurai online information, "Central Excise:  A 
guide to Assesses".  Viewed at:  http://www.cen tralexcisemadurai.tn.nic.in/what_central.html. 
32 Customs Act 1962, Section 14(2). 
33 "Tariff values" (i.e. reference price) were in troduced in 2001 through Customs (non-tariff) 
Notification No. 36/2001, 3 August 2001, and last amended through Customs (non-tariff) Notification 
No. 37/2011, 31 May 2011. 
34 WTO document G/VAL/W/173, 29 October 2008. India WT/TPR/S/249 
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Table III.2 
Tariff values (reference prices), 2006-11 
HS code Description Tariff value (US$/tonne) 
2006 2007 2008 2009 2010 2011a 
1511.10.00 Palm oil (crude) 447 447 447 447 447 447 
1511.90.10 Palm oil (RBD) 476 476 476 476 476 476 
1511.90.90 Palm oil (others) 462 462 462 462 462 462 
1511.10.00 Palmolein (crude) 481 481 481 481 481 481 
1511.90.20 Palmolein (RBD) 484 484 484 484 484 484 
1511.90.90 Palmolein (others) 483 483 483 483 483 483 
1507.10.00 Soyabean oil (crude) 580 580 580 580 580 580 
7404.00.22 Brass scrap (all grades) 4,524 4,205 3,252 3,476 4,320 4,360 
1207.91.00 Poppy seeds n.a. 5,398 4,238 3,144 3,445 2,520 
n.a. Not applicable. 
a Up to 31 May 2011. 
Note: "Tariff values" for poppy seeds were introduced through Cu stoms (non-tariff) Notification No. 116/2007, 3 December 2007.  
Reference prices are for end year. 
Source:  Customs (non-tariff) Notifications Nos. 130/2006, 1 December 2006;  122/2007, 17 December 2007;  141/2008, 
31 December 2008;  188/2009, 31 December 2009;  03/2010, 31 December 2010;  and 37/2011, 31 May 2011.  
24. India maintains, in the WTO, the special and differential treatment pr ovisions invoked under 
the Tokyo Round Agreement.35  Hence, India continues to maintain a reservation concerning the 
reversal of the sequential order of  Articles 5 and 6, and a reservati on to apply Article 5.2 whether or 
not the importer so requests.36  In 2009, India decided to lift the reservation on minimum values 
entered under paragraph 3 of the Protocol to the Agreement on Implementation of Article VII of the 
GATT 1994, and in paragraph 2 of the WTO Agreement.37  The authorities indicated that  India did 
not apply minimum values despite the reservation maintained until 2009. 
25. The transaction value is generally used to assess the additional duty on imports.38  However, it 
is not used to assess the additional duty on im ports of packaged goods, which, if produced 
domestically, would be subject to a maximum retail price (MRP).39  In this case, to assess the 
additional duty, the value of the goods is determin ed using the MRP declared on the package minus 
an "abatement" for the like domestic goods.40  The "abatement" takes into account taxes payable on 
goods and freight, which are included in the MRP.  In March 2011, 143 items were subject to a 
MRP-based excise duty payment and the "abatement " ranged from 20% to 40% of the retail price.41  
                                                      
35 WTO document WT/L/38, 15 February 1995. 
36 WTO document G/VAL/W/162/Rev.1, 15 October 2009. 
37 WTO document G/VAL/M/48, 23 December 2009. 
38 Customs Tariff Database online information, "Special CVD in Lieu of Sales Tax under Section 3(5) 
of CTA 1975".  Viewed at:  http://custadaindi a.com/CUSTADA-Online/document/document/Special%20CVD 
%20in%20Lieu.htm. 
39 The basic duty on goods subject to an MRP is levied on the transaction value. 
40 The excise duty on domestic goods is levied on their value;  which should be the retail sale price 
declared on the goods less an amount of abatement, if any, from the retail sale price, as allowed by the Central Government by notification in the Gazette of India  (Central Excise Act 1944, Chapter II, Section 4A (Valuation 
of excisable goods with refe rence to retail sale price). 
41 "Retail sale price" means, except for medicaments (other than those used ex clusively in Ayurvedic, 
Unani, Siddha, homeopathic or bio-chemic systems), the maximum price at which the excisable goods in 
packaged form may be sold to the ultimate consumer, when  the price is the sole consideration for such sale.  It 
includes all taxes (local or otherwise), freight and tran sport charges, commissions to  dealers, and all charges 
towards advertisement, delivery, packing, forwarding, etc.  For medicaments, "retail sale price" means the retail WT/TPR/S/249 Trade Policy Review 
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If more than one retail sale price is declared for the imported good, the highest price is used to assess 
the duty. MRP-based valuation is not applicable to pr oducts sold in bulk to industries, and to packages 
containing more than 25 kg or litres (excluding cemen t and fertilizer sold in bags of up to 50 kg. 
(iii) Rules of origin 
26. India does not apply non-preferential rules of origin.42  Preferential rules of origin are applied 
under regional and bilateral trade agreements (Table  III.3);  these have not changed since the last 
Review of India.  Maximum foreign-content require ments range from 30% to 70%;  other criteria to 
determine origin are sufficient transformation and change in tariff classification.  There are also 
product-specific rules of origin under the SAFTA (180 pr oducts), and agreements with Korea, Rep. of 
(1,780 products)43, and Singapore (380 products).44 
Table III.3 
Rules of origin under preferential trade agreements, 2011 
Agreements Maximum foreign-content requirements Minimum cumulative local-content requirements 
Regional   
Asia-Pacific Trade 
Agreement (APTA) 55% of the f.o.b. value (LDCs:  65%) 60% of the f.o.b. value (LDCs:  50%) 
Global System of Trade 
Preferences (GSTP) 50% of the f.o.b. value (LDCs:  60%) 60% of the f.o.b. value (LDCs:  50%) 
South Asian Free-Trade 
Areas (SAFTA)a 60% of the f.o.b. value (LDCs:  70%;  Sri Lanka:  
65%) and change in tariff classification 50% of the f.o.b. value, 20% of the f.o.b. valueb and 
change in tariff classification 
South Asia Preferential 
Trade Arrangement 
(SAPTA) 60% of the f.o.b. value (LDCs:  70%) 50% of the f.o.b. value (LDCs:  40%) 
Bilateral   
Afghanistan 50% of the f.o.b. value and change in tariff 
classification 40% of the f.o.b. value and 30% of the f.o.b. valueb 
ASEANa 65% of the f.o.b. value and change in tariff 
classification 65% of the f.o.b. value and change in tariff 
classification  
Bhutan n.a.  n.a.  
Chile 60% of the f.o.b. valuec and change in tariff 
classification  60% of the f.o.b. value and change in tariff 
classification  
Korea, Rep. ofa 65% of the f.o.b. value and change in tariff 
classification 65% of the f.o.b. value and change in tariff 
classification  
MERCOSUR 40% of the f.o.b. valuec 40% of the f.o.b. value 
Nepal 70% of the f.o.b. value and change in four-digit 
tariff classification  n.a. 
Singaporea 60% of the f.o.b. value and change in tariff 
classification 60% of the f.o.b. value and change in tariff 
classification  
Sri Lanka 65% of the f.o.b. value and change in tariff 
classification 35% of the f.o.b. value and 25% of the f.o.b. valuec 
Thailandd 60% of the f.o.b. value and change in tariff 
classification  40% of the f.o.b. value and change in the tariff 
classification  
Table III.3 (cont'd)
                                                                                                                                                                     
price displayed by the manufacturer under provisions of the Drugs (Prices Control) Order 1995 (Central Excise 
(non-tariff) Notification No. 49/200 8, 24 December 2008, as amended by Central Excise (non-tariff) 
Notifications Nos. 18/2009, 7 July 2009;  9/2010, 27 February 2010;  and 11/2011, 24 March 2011.  For Central 
Excise Notifications, Circulars, and Instructions, see Central Board of Excise and Customs online information.  
Viewed at:  http://www.cbec. gov.in/cae1-english.htm).   
42 WTO document G/RO/N/1, 9 May 1995. 
43 Information provided by the authorities. 
44 Department of Commerce online information, "Interna tional Trade:  Trade Agreements".  Viewed at:  
http://commerce.nic.in/tr ade/international_ta.asp?id=2&trade=i. India WT/TPR/S/249 
 Page 43 
 
 
Agreements Maximum foreign-content requirements Minimum cumulative local-content requirements 
Other preferential areas   
Mauritius, Seychelles, and 
Tonga 50% of ex-work price of five specific itemse and 
75% ex-work prices for others 50% of ex-work price of five specific itemse and 
75% ex-work prices for others 
Least-developed countries 70% of the f.o.b. value and change in tariff 
classification for not wholly produced or obtained 
category  70% of the f.o.b. value and change in tariff 
classification for not wholly produced or obtained 
category  
n.a. Not applicable. 
a Product-specific rules of origin apply. 
b Domestic value content in the exporting country. 
c Foreign contents should not exceed 15% of the f.o.b. value for sets, as defined in General Rule 3 of the Harmonized System. 
d Not notified to the WTO. e Manual sewing and knitting machines (and part s thereof) or those which require less th an one quarter of one brake-horsepower 
for their operation;  cycles (other than motor cycles) and part s and accessories thereof, excluding rubber tyres and tubes;  mo tor 
cars including taxi cabs and articles (other than rubber tyres and tubes) to be used as parts and accessories thereof;  motor 
omni-buses, chassis of motor omni-buses, motor vans and moto r lorries, and parts of mechani cally propelled vehicles and 
accessories excluding rubber tyres and tubes;  and motor cycles  and motor scooters and articles (other than rubber tyres and 
tubes) adapted for use as parts and accessories thereof. 
Note: Rules of origin are not covered under th e India-Bhutan preferential trade agreement. 
Source:  Department of Commerce online information, "International Trade:  Trade Agreements".  Viewed at:  
http://www.commerce.nic.in/tr ade/international_ta.asp?i d=2&trade=I;  Customs Ge neral Exemption Nos. 70 
and 71.  Viewed at:  http://www.cb ec.gov.in/customs/cst-809/cs-gen66-90.pdf ;  and information provided by the 
Indian authorities;  and inform ation provided by the authorities.  
(iv) Tariffs 
(a) Applied tariff structure 
27. Under the Customs Tariff Act 1975, the MFN tariff is based on the standard rate, which is a 
statutory duty;  however, the "effective" tari ff may be lower because of general- or 
industrial-use-based exemptions.  India's tariff is  announced in the annual Budget at the end of 
February each year;  however, additional changes to  individual tariff rates may be made during the 
year by the Ministry of Finance's Central Boar d of Excise and Customs, through notifications 
published in the Gazette of India ;  this adds to the complexity of the tariff.  During 2007-10, the 
Government issued some 230 tariff-rate amendment notifications.45  In addition to the standard rate, 
importers are required to pay an  additional duty ("countervailing dut y") and a special additional duty 
instead of local taxes (section (v)).  To determin e the applied tariff (and other customs duty) rate 
applicable to a particular product, separate custom s and excise tax schedules must be consulted.  
These schedules should, in addition, be cross-check ed with any applicable customs or excise 
notification that may have raised or reduced the rate on the product. 
28. The 2010/11 applied tariff (HS2007 nomenclature) has 11,328 tariff lines at the eight-digit 
level, comprising rates ranging from zero to 150%.  Some 94% of tariff lines are ad valorem ;  duty is 
levied on the c.i.f. value of imports.  Alternate or  specific duties apply to 6.1% of all tariff lines, 
unchanged since 2006/07 (Table III.4).  The simple av erage applied MFN tariff was 12% in 2010/11, 
down from 15.1% in 2006/07.46  Both agricultural and industrial average tariffs declined reflecting 
India's shift towards lower tariffs.  India provid es a number of exemptions on imported inputs for 
certain sectors or importers, depending on the industrial use of the import.  As a result of these 
                                                      
45 During 2007-10, the Indian Government issued 554 tariff rate amendment notifications.  These 
included 225 notifications related to changes in tariff ra tes;  and others related to imposition of anti-dumping 
and safeguard duties, or to give eff ect to commitments under international agreements (information provided by 
the authorities). 
46 Calculations exclude specific rates and include the ad valorem  part of the alternate rates. WT/TPR/S/249 Trade Policy Review 
Page 44 
  
exemptions, the effective applied ta riff is considerably lower than th e simple average standard rate.  
However, because a large majority of the exemptions relate to industrial use, they cannot be included 
in the general tariff analysis.  To the extent that a tariff exemption is clearly related to a particular 
tariff line, the Secretariat has tried to  incorporate it in the tariff analysis. 
Table III.4 
Tariff structure, 2006/07 and 2010/11 
(%) 
  MFN effective applied rates 
Final bound 
ratea 2006/07 2010/11 
1. Bound tariff lines (% of all tariff lines) 75.2 75.6 75.6 
2. Simple average rate 15.1 12.0 46.4 
 Agricultural products (HS01-24) 38.2 35.1 119.1 
 Industrial products (HS25-97) 11.8 8.6 33.7 
 WTO agricultural products 36.2 33.2 118.3 
 WTO non-agricultural products 12.0 8.9 32.0 
 Textiles 12.2 9.6 26.9 
 Clothing 12.5 10.0 37.1 
3. Duty free tariff lines (% of all tariff lines) 2.7 3.2 1.9 
4. Domestic tariff "peaks" (% of all tariff lines)b 2.5 2.2 6.5 
5. International tariff "peaks" (% of all tariff lines)c 12.5 11.9 87.7 
6. Overall standard deviati on of tariff rates 15.0 14.2 40.8 
7. Coefficient of variation of tariff rates 1.0 1.2 0.9 
8. Non- ad valorem  tariffs (% of all tariff lines) 6.1 6.1 8.0 
9 Nuisance applied rates (% of all tariff lines)d 0.5 0.7 0.0 
a Based on 2010/11 tariff schedule.  Implem entation of final bound rates was complete d in 2005.  Calculations are based on 
8,567 bound tariff lines, of which 8,503 are fully bound and 64 partially bound. 
b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied rate. 
c International tariff peaks are defined as those exceeding 15%. 
d Nuisance rates are those greater than zero, but less than or equal to 2%. 
Note: The 2006/07 tariff is based on HS02 nomenclature, consistin g of 11,695 tariff lines;  the 2010/11 tariff is based on HS07  
nomenclature consisting of 11,328 tariff lines.  Calc ulations exclude specific rates and include the ad valorem  part of alternate 
rates.  MFN applied rates include exemptions, applicable at the full eight-digit tariff line. 
Source: WTO Secretariat calculations , based on data provided by  the Indian authorities. 
29. Non- ad valorem  rates apply to 690 tariff lines: five are specific rates (i.e. almonds, shelled 
and in shell (two HS lines), and platinum (three HS lines)), while 685 (6.1% of all tariff lines) are 
alternate rates (textiles and clothing).  The simple  average applied MFN tariff in 2010/11 was 13.4% 
including AVEs (12% without AVEs).  The inclusion of AVEs affects only industrial average tariffs, which increase from 8.6% to 10.3% (10.6% under WTO non-agriculture).  Mainly  affected are textile 
and clothing, with average protection of 16.2% and 25.7%, respectively, and of 9.6% and 10% if AVEs are not included in the tariff analysis.  This confirms that protection may increase considerably 
by the use of specific rates:  some goods have  protection of around 60 0% (e.g. shawls, scarves 
(exceeding 60 cm) and the like of s ilk (HS 6214.10.20 (598.32%)), wome n's or girls' suits of silk 
(HS 6104.19.20 (620%)), and scarves of silk measuring 60 cm or less (HS 6214.10.10 (656.41%)). 
30. In 2010/11, tariffs range from zero to 150%.  The majority of lines (71% or 8,042) carry a rate 
greater than 5% but less than 10%, while 12.8% of total lines have a tariff rate greater than zero but 
less than 5% (Chart III.1).  This is a major change  from 2006/07, when 65% of all lines were within 
the 10-15% range, and 10.4% of lines at 25-30%.  The number of duty-free lines has increased 
slightly.  Although average rates have declined, so me products continue to bear very high rates, 
notably some beverages, spirits, and coffee and tea.  Dispersion remains high:  the standard deviation 
shows only a slight decrease, from 15 at the tim e of the last Review of India to 14.2. India WT/TPR/S/249 
 Page 45 
 
 
(3.2%)(12.8%).(71.0%)
(1.1%)(0.9%)
(0.1%)(8.7%)
(0.9%)
(0.4%)(1.0%)
02004006008001,0001,2001,4001,6001,8002,0002,200
Duty free >0≤  5 >5 ≤  10 >10 ≤  15 >15 ≤  20 >20 ≤  25 >25 ≤  30 >30 ≤  60 >60 ≤  95 >95
Source:     WTO Secretariat calculations, based on data provided by the Indian authorities.Chart III.1
Distribution of MFN applied tariff rates, 2010/11
Tariff rates 8,200
8,000
Note: Calculations include the ad valorem part of alternate rates.  Figures in parentheses denote the share of total lines.Number of tariff lines
 
31. Average tariff protection declined from 15.1% to 12% in 2010/11.  Since 2007, the simple 
average tariff for agricultural goods (WTO definition) has declined from 36.2% to 33.2%, but remains 
substantially higher than for manufactured goods (Table  III.5).  Beverages and spirits bear the highest 
protection, followed by coffee and tea, dairy produc ts, and sugar and confectionary.  Non-agricultural 
products face an average tariff of 8.9%, down from 12%  in 2007.  The decreas e in the average rate 
reflects a decrease from a peak rate of 12.5% in 2006/07 to rates of 10% and 7.5%.  However, fisheries and transport equipment still bear above  average tariff protection of 29.5% and 21.5%, 
respectively. 
32. India's tariffs are higher for agricultu re goods and processed goods than for 
semi-manufactures.  This responds in part to the strategy of protecting agriculture and promoting the 
development of manufacturing activities, which require  imports of intermediate goods.  It may also 
reflect India's policy of granting import duty c oncessions for intermediate goods under different 
export and investment promotion schemes (section (3)(vii)(c)). WT/TPR/S/249 Trade Policy Review 
Page 46 
  
Table III.5  
Summary analysis of the tariff, 2006/07 and 2010/11  
 2006/07 effective applied rates 
(MFN) 2010/11 effective applied rates 
(MFN) Bound 
tariff 
No. of 
lines Average 
(%) Range 
(%) No. of 
lines Average 
(%) Range 
(%) Range 
(%) 
Total 11,695 15.1 0-150 11,328 12.0 0-150 0-300 
HS 01-24 1,466 38.2 0-150 1,433 35.1 0-150 10-300 
HS 05-97 10,229 11.8 0-100 9,895 8.6 0-70 0-150 
By WTO definition        
Agricultural products 1,492 36.2 0-150 1,431 33.2 0-150 10-300 
Animals and products thereof 108 30.7 5-100 106 30.8 5-100 35-150 
Dairy products 32 35.3 30-60 32 34.4 30-60 40-150 
Fruit, vegetables, and plants 376 28.3 0-100 355 27.6 0-100 10-150 
Coffee and tea 75 74.7 17.5-100 75 74.7 17.5-100 17.5-150 
Cereals and preparations 138 32.8 0-90 137 30.4 0-90 35-150 
Oils seeds, fats, oil, and their produc ts 204 42.7 0-100 196 18.5 0-100 15-300 
Sugars and confectionary 38 33.4 10-60 38 33.4 10-60 45-150 
Beverages, spirits, and tobacco 122  73.1 10-150 123 78. 7 7.5-150 35-150 
Cotton 11 13.2 0-30 11 5.5 0-30 100-150 
Other agricultural products, n.e.s. 388 24.9 0-70 358 25.1 0-70 10-150 
Non-agricultural products (incl. 
petroleum) 10,203 12.0 0-70 9,897 8.9 0-70 0-150 
Non-agricultural products (excl. 
petroleum) 10,185 12.0 0-70 9,879 8.9 0-70 0-150 
Fish and fishery products 164 29.5 5-30 176 29.5 5-30 35-150 
Minerals and metals 1,955 9.1 0-10 1,912 7.1 0-10 0-40 
Chemicals and photographic supplies 2,511  12.1 0-10 2,471 8.1 0-10 0-150 
Wood, pulp, paper, and furniture 530 11.5 0-10 495 9.2 0-10 25-40 
Textiles 1,579 12.2 5-10 1,555 9.6 5- 10 10-40 
Clothing 419 12.5 10-10 397 10.0 10-10 35-40 
Leather, rubber, footwear, travel goods 338 12.5 0-70 322 10.2 0-70a 3-40 
Non-electric machinery 1,099 11.3 0-10 1,094 7.1 0-10 0-40 
Electric machinery 560 9.8 0-10 537 6.7 0-10 0-10 
Transport equipment 246 32.8 0-60 244 21.5 0-60 3-40 
Non-agricultural products, n.e.s. 784 10.8 0-10 676 8.6 0-10 0-40 
Petroleum 18 9.7 0-10 18 8.2 0-10 n.a. 
By sectorb        
Agriculture, forestry and fisheries 659 29.5 0-100 621 28.8 0-100 10-150 
Mining 229 5.7 2-12.5 232 5.1 0-10 5-40 
Manufacturing 10,806 14.4 0-150 10,474 11.1 0-150 0-300 
Manufacturing excl. food processing 9,934 12.0 0-100 9,605 8.8 0-60 0-150 
By stage of processing        
First stage of processing 1,300 23.6 0-100 1,261 22.5 0-100 5-150 
Semi-processed products 4,465 11.7 0-100 4,339 8.6 0-60 0-150 
Fully processed products 5,930 15.8 0-150 5,728 12.2 0-150 0-300 
n.a.  Not applicable. 
a  Tariff lines with applied rates at 70% are unbound. 
b  ISIC Rev.2 classification.  Electricity, gas, and water is excluded (1 tariff line). 
Note:   Calculations exclude specific rates and include the ad valorem part of alternate rates.  
Source :   WTO Secretariat calculations, based on data provided by th e Indian authorities. 
(b) Bound tariff 
33. The implementation of India's Uruguay Round ta riff commitments was completed in 2005.  
Some 75% of India's tariff is bound, 100% for agricultural (WTO definition), and 71.6% for 
non-agricultural products.  Bound rates are mainly ad-valorem  (90.2%);  non- ad valorem  bound rates 
apply mainly to textile and clothing.  India did not bind any tariff lines in HS sections 12 (footwear India WT/TPR/S/249 
 Page 47 
 
 
and headgear), 19 (arms and ammun itions), and 21 (works of art);  partial bindings are mainly in 
HS section 11 (textiles and clothing) (Chart III.2).  Bindings range from zero to 40% for 
non-agricultural products, with some exceptions such as fish products (150%);  and range from 10% 
to 300%, for agricultural products, with most bound at  100% and 150%.  Some edible oils are bound 
at 300%.  The average bound tariff is 118.3% for ag ricultural products (WTO definition) and 32% for 
non-agricultural products.  Bound rates exceed app lied rates;  the average bound tariff is 46.4%, 
compared with an average MFN tariff of 12%. 
020406080100120140160
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21Calculations exclude specific rates and include the ad valorem part of alternate rates.  Only sectio n 2 is fully bound;  sections 12, 19, 
and 21 are fully unbound.  All other sections include bound, partially bound, and unbound lines.
WTO Secretariat calculations, based on data provided by the Indian authorities.Per centChart III.2                   
Average applied MFN and bound tariff rates, by HS section, 2010/11
Note:
Source :01   Live animals & prod.        
02   Vegetable products
03   Fats & oils      
04   Prepared food, etc.
05   Mineral products06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals and prod.
16   Machinery
17   Transport equipment18   Precision instrument19   Arms & ammunition
20   Miscellaneous manuf.
21   Works of art, etc.MFN applied rate  
Bound rate
Average applied rate
(12.0%)Average bound rate
(46.4%)200220
 
34. The gap between applied and bound tariff rates provides the authorities with scope to raise 
applied tariffs.  These gaps allow the Government to modify tariff rates in response to domestic and 
international market conditions.  If  domestic agricultural prices rise, tariff rates are lowered to create 
downward pressure on domestic prices and minimize the impact on consumers;  when prices fall, the 
rates are often increased to protect farmers by raising the overall cost of imports. 
35. Under Article XXVIII:5 of the GATT 1994, India reserved the right to modify its 
Schedule XII during the three-year period commencing 1 January 2009.47 
                                                      
47 WTO document G/MA/208, 6 October 2008. WT/TPR/S/249 Trade Policy Review 
Page 48 
  
(c) Tariff-rate quotas 
36. Tariff-rate quotas are maintained on five lines at the HS six-digit level (19 tariff lines at the 
HS eight-digit level according to the authorities):  mi lk and milk powder;  maiz e (corn);  rape, colza, 
and mustard oil;  and crude sunflower seed and safflower oil.48  More recently (22 December 2010), 
due to a shortage of natu ral rubber, natural rubber (five tariff lin es at the HS eight-digit level) was put 
under a tariff quota regime for the remainder of the financial year 2010/11.49  A tariff quota was also 
put in place for butter and other animal fats. 
37. Tariff quotas are allocated by the Directorate General of Foreign Tr ade (DGFT), upon request 
by designated agencies:  the Nati onal Agricultural Cooperative Marke ting Federation of India Ltd.;  
the State Trading Corporation of India Ltd.;  PEC Ltd.;  and the National Dairy Development Board.  
The authorities noted that the fill ratio of these quotas is low, apparently because of lack of demand 
(Table III.6). 
Table III.6 
Products subject to tariff-rate quotas, 2006-11 
(Tonnes) 
Description HS No. In/out of 
quota 
rate (%)a In/out of 
quota 
rate (%)b Tariff-rate quota (in-quota total imports) 
2006/07 2007/08 2008/09 2009/10 2010/11 
Skimmed milk 
powder/whole milk 
powder 0402.10 
0402.21 15c/60 0c, d/60 10,000 
(0.0) 10,000 
(0.0) 10,000 
(0.0) 10,000 
(3,000) 30,000 
(..) 
Maize (corn), other than seed quality  1005.90 15/60 0/50 500,000 
(1,436) 500,000 
(1,021) 500,000 
(6,087) 500,000 
(16,972) 500.000 
(..) 
Crude sunflower seed 
oil and safflower seed 
oil 1512.11 50/300 0 150,000 
(95,883) n.a.e n.a.e n.a.e n.a.e 
Rape, colza or mustard 
oil 1514.19 
1514.99 45/75 7.5f 150,000 
(0.0) 150,000 
(0.0) 150,000 
(0.0) 150,000 
(0.0) 150,000 
(..) 
Butter and other fatsd 0405.10 
0405.90.10 
0405.90.20 n.a. 0/30  n.a. n.a. n.a. n.a. 15,000 
(..) 
Butter and other fatsd 0405.20 
0405.90.90 n.a. 0/40 n.a. n.a. n.a. n.a. .. 
.. Not available. 
n.a. Not applicable. 
a Based on WTO document W/LET/440, 4 April 2003. 
b Based on the Indian tariff 2010/11. c 
Applicable to cumulative imports of goods under tariff lines 0402.10 and 0402.21.  
d Customs Notification No. 33/2010, 12 March 2010. 
e Given that the applied tariff rate is 0% , the tariff quota has not applied since 2007. 
f The 2010/11 tariff does not show an out-of- quota rate for rape, colza or mustard oil but just an applied rate of 7.5%, depend ing 
upon the product (information provided by the authorities).  
Source:  WTO documents W/LET/440, 4 April 2003;  G/MA /TAR/RS/66, 1 May 2000;  and G/AG/N/IND/5, 
 7 March 2011;  Central Board of Excise and Customs online information, "Customs:  Notif ications".  Viewed at:  
 http://cbec.gov.in/cae1-english.htm;  and information provided by the Indian authorities (Indian tariff 2010/11). 
38. Under the free-trade agreement with Sri Lanka , India maintains tariff-rate quotas on clothing 
and tea imports (Chapter II).  No data were av ailable on the extent to which these preferential 
tariff-rate quotas have been filled in recent years. 
                                                      
48 WTO document G/MA/TAR/RS/66, 1 May 2000. 
49 Customs Notification No. 128/2010, 22 December 2010. India WT/TPR/S/249 
 Page 49 
 
 
(d) Tariff concessions 
39. Under Section 25(1) of the Customs Act 1962, the Central Government is empowered to 
exempt any goods from customs duties on grounds of public interest.  Tariff concessions are 
announced in the annual Budget and throughout the y ear through notifications by the Ministry of 
Finance.50  These concessions are both product-specific and based on end-use.  During the review 
period, revenue forgone as a result of customs dut y concessions increased from 29% to 39% of total 
revenue, amounting to some US$168 billion during 2006-07/2009-10.51 
40. Goods imported under processing-for-export regi mes (e.g. special economic zones (SEZs) 
and export-oriented units (EOUs)) are eligible for tariff concessions (section (3)(vii)(a)).  Other 
programmes to promote exports and investment also provide for tariff concessions 
(section (3)(vii)(c)). 
(e) Preferential tariffs 
41. Preferential rates are granted for certain articles under GSTP, regional (SAFTA, APTA, 
MERCOSUR, and ASEAN), and bilateral agreements  (Singapore, Korea, Rep. of, Chile, and 
Sri Lanka).  Under the GSTP, India has granted tariff concessions to 12 countries on a limited number 
of products.52  Only preferences under the SAFTA II (at 2.3%) and under the Sri Lanka FTA (at 
2.3%) are significantly lower than the simple aver age applied MFN of 12% (Table III.7).  In other 
instances, preferences are not substantial (Korea, Re p. of) or the number of tariff lines subject to 
preferences is minimal (e.g. MERCOSUR and Chile). 
Table III.7  
Summary analysis of the preferential tariff, 2010/11  
 Preferential 
linesa 
(% of all 
tariff lines) Total WTO 
agriculture WTO 
non-agriculture Textiles Clothing Avg. (%) 
Duty-free 
rates (%) 
Avg. (%) 
Duty-free 
rates (%) 
Avg. (%) 
Duty-free 
rates (%) 
Avg. (%) 
Duty-free 
rates (%) 
Avg. (%) 
Duty-free 
rates (%) 
MFN  12.0 3.2 33.2 5.6 8.9 2.8 9.6 0.0 10.0  0.0 
Regional 
a g r e e m e n t s             
SAFTA Ib 69.3 8.9 3.2 22.5 5.6 6.9 2.8 7.4 0.0 10.0  0.0 
SAFTA IIc 87.6 2.3 89.2 15 66.7 0.5 92.4 0.04 98.7 6.5  34.8 
ASEANd 79.1 8.8 3.5 28.8 5.6 5.9 3.2 6.4 0.0 6.7  0.0 
APTAe 10.3f 11.5 4.3 33.1 5.6 8.4 4.1 9.6 0.0 10.0  0.0 
MERCOSURg 3.4 11.9 3.2 33.2 5.6 8.9 2.7 9.5 0.0 10.0  0.0 
Bilateral 
a g r e e m e n t  ( F T A )             
Sri Lankah 91.6 2.3 79.1 6.4 91.9 1.7 77.3 7.1 4.4 5.0 0.0 
Korea, Rep. ofi 50.8 11.0 4.8 30.5 5.6 8.2 4.7 9.0 0.5 9.4 0.0 
Singaporej 43.0 8.8 22.5 31.0 12.4 5.7 23.9 7.9 13.7 8.7  0.0 
Table III.7 (cont'd)
                                                      
50 Ministry of Finance (2007a), (2008), (2009), and (2010c). 
51 Ministry of Finance (2007a), (2008), (2009), and (2010c). 
52 Customs Notification No. 236/89, 1 September 1989. WT/TPR/S/249 Trade Policy Review 
Page 50 
  
 Preferential 
linesa 
(% of all 
tariff lines) Total WTO 
agriculture WTO 
non-agriculture Textiles Clothing Avg. (%) 
Duty-free 
rates (%) 
Avg. (%) 
Duty-free 
rates (%) 
Avg. (%) 
Duty-free 
rates (%) 
Avg. (%) 
Duty-free 
rates (%) 
Avg. (%) 
Duty-free 
rates (%) 
Thailandk 5.6 11.8 5.4 33.1 6.1 8.7 5.3 9.6 0.0 10.0 0.0 
Chilel 1.3 11.9 3.2 33.1 5.6 8.9 2.8 9.6 0.0 10.0  0.0 
            
LDCsm 90.4 6.6 3.2 25.0 5.6 4.0 2.8 4.0 0.0 6.1 0.0 
a  The 2010/11 MFN tariff consists of 11,328 tariff lines, of which 359 are duty free.  The number of preferential lines includ es 
 only lines on which the rates, at fully applied eight-dig it level, are lower than the corresponding MFN applied rate. 
b  Preferential rates for Pakistan and Sri Lanka (Customs Notifications Nos. 133/2010 and 134/2010). 
c  Preferential rates apply to SAFTA LDC members:  Banglades h, Bhutan, the Maldives, and Nepal (Customs Notifications 
Nos. 126/2007, 36/2010, and 133/2010).  Fo r Bangladesh, duty-free in-quota rates a pply to textiles (Customs Notification 
No. 51/2008). 
d  ASEAN:  preferential rates applicab le to Malaysia, Singapore, and Tha iland (Customs Notification No. 135/2010). 
e  Asia-Pacific Trade Agreement:  preferential rates apply to Bangladesh, China, Korea (Rep. of), and Sri Lanka (Customs 
Notifications Nos. 89/2006 and 134/2006). 
f  For Bangladesh, the percentage of preferential lines equals 10.9%. 
g  MERCOSUR:  preferential rates apply to Argentina, Braz il, Paraguay, and Uruguay (Customs notification No. 57/2009). 
h  Customs notifications Nos. 43/2003, 57/2005, 128/2006, 3/2007,  52/2008, 126/2002, 75/2007, and 2/2007.  Duty-free in-quota 
rates apply to clothing products (Customs Notification No. 52/ 2008).  In-quota rates are applied to tea (Customs Notification 
No. 60/2000) and to desiccated coconut (Customs Notification No. 2/2007). 
i  Customs Notifications Nos. 151/2009 and 137/2010. 
j  Customs Notifications Nos. 73/2005,  74/2005, 75/2055, 69/2009, and 131/2010. 
k Customs Notifications Nos. 85/2004 and 86/2006. l  Customs Notification No. 101/2007. 
m  Customs Notifications Nos. 96/2008 and 95/2010.  Pref erential rates apply to 21 African and 5 Asian countries. 
Source:   WTO Secretariat, based on data provided by the Indian  authorities and Central Bo ard of Excise and Customs 
 online information, "Customs:  Notific ations".  Viewed at:  http://www.cbec .gov.in/customs/cs- act/notifications/ 
 cs-notfns-idx.htm. 
(v) Other charges affecting imports 
42. India applies a number of duties and charges on imports, other than tariffs.  These include:  
the additional customs duty, the special additiona l duty, the education cess and the secondary, higher 
education cess.  Some charges and cesses are al so applied on specific products (see below).   
43. The additional customs duty (AD) is aimed at removing or reducing what the Government 
considers a pro-import bias resulting from the appli cation of central excise duties to domestically 
manufactured goods, in accordance with India's trade legislation.53  To this end, th e AD rate should be 
equivalent to the central excise duty, also refe rred to as Central Value Added Tax (CENVAT), on 
domestically produced goods of the same tariff classification.54  The general AD rate was 10% in 
2010.  However, some goods may have lower rat es of 4% and 0% and specific or compound rates.55  
The rate and its exceptions are defined in each Budget or through subordinate legislation 
(notifications).  The 4% special additional custom s duty (SAD) continues to be imposed on imports, 
with few exceptions (14.8% of all tariff lines)56, to partially compensate for the sales tax, state 
value-added tax, local tax or any other charges leviable on a like article  on its sale, purchase or 
                                                      
53 Customs Tariff Act 1975, Section 3(1). 
54 The excise and tariff nomenclatures are harmonized at HS eight-digit level. 
55 This is the case of the additional duty on petroleum products (Central Excise Notifications 
Nos. 4/2006, 1 March 2006;  4/2008, 1 March 2008;  and 14/2009, 7 July 2009). 
56 Some 12 lines in HS 71 (articles of jewellery) have SAD duty of 1%. India WT/TPR/S/249 
 Page 51 
 
 
transportation in India.57  However, as the SAD is an across-the-board tax applied at a flat rate on 
most goods, it may not always be equivalent to local sales taxes on simila r domestically produced 
goods, which may be higher or lower.  The SAD paid  on imports subsequently sold within India and 
for which the importer has paid state-le vel value-added taxes, may be refunded.58  The application of 
the AD and SAD was the subject of a dispute in the WTO in 2007.59 
44. Since 2004, an education cess has been charged on imports at the rate of 2% on all aggregate 
customs duties (excluding safeguard, counterva iling or anti-dumping duties if applicable).60  T h e  
secondary and higher education cess of 1%, which en tered into force through the Finance Bill of 
2007, is also levied on all imports.  This cess is ca lculated on the aggregate value of all excise duties 
(including the additional and the special duties or  any other duty or excise), but excluding the 
education cess and safeguard, countervailing or  an anti-dumping duty if applicable.   
45. Calculation of all charges applied imports in cluding landing charges, the effective customs 
duty, the additional customs duty, the special additional customs duty,  and the education cess show an 
average protection of 25.6% compared to 12% (Table  III.8).  The authorities noted that some of these 
charges are "in lieu" of domestic taxes.   
Table III.8 
Summary analysis of Indi a's imports charges, 2010/11  
 No. of 
lines Effective applied rates 
(MFN) Total duty rate, incl. extra 
chargesa 
Average (%) Range (%) Average (%) Range (%) 
Total 11,328 12.0 0-150 25.6 0-527.4 
HS 01-24 1,433 35.1 0-150 42.6 0-527.4 
HS 05-97 9,895 8.6 0-70 23.1 0-107.1 
By WTO definition      
Agricultural products 1,431 33.2 0-150 41.8 0-527.4 
Animals and products thereof 106 30.8 5-100 36.4 9.4-111.1 
Dairy products 32 34.4 30-60 39.7 30.9-68.3 
Fruit, vegetables, and plants 355 27.6 0-100 33.9 0-111.1 
Coffee and tea 75 74.7 26.9-100 87.8 36.1-111.1 
Cereals and preparations 137 30.4 0-90 39.1 0-192.6 
Oils seeds, fats, oil, and thei r products 196 18.5 0-100 23.0 0-103 
Sugars and confectionary 38 33.4 10-60 51.8 10.3-85.9 
Beverages, spirits, and tobacco  123 78.7 7.5-150  98.0 23.9-527.4 
Cotton 11 5.5 0-30 7.3 0-36.1 
Other agricultural products, n.e.s. 358 25.1 0-70 33.5 0-79 
Non-agricultural products (incl. petroleum) 9,897 8.9 0-70 23.2 0-107.1 
Non-agricultural products (excl. petroleum) 9,879 8.9 0-70 23.3 0-107.1 
Fish and fishery products 176 29.5 5-30 34.1 5.2-36.1 
Minerals and metals 1,912 7.1 0-10 21.0 0-31.7 
Chemicals and photographic supplie s 2,471 8.1 0-10 23.6 0-26.8 
Wood, pulp, paper, and furniture 495 9.2 0-10 21.1 0-26.8 
Textiles 1,555 9.6 5-10 23.5 9.4-26.8 
Clothing 397 10.0 10-10 22.0 15-26.8 
Leather, rubber, footwear, travel goods 322 10.2 0-70 25.2 0-79 
Non-electric machinery 1,094 7.1 0-10 22.4 0-26.8 
Table III.8 (cont'd)
                                                      
57 Customs Tariff Act 1975, Section 3(5). 
58 Customs Notification No. 102/2007, 14 September, 2007. 
59 WTO document series WTO/DS360 (India:  additional and extra-additional duties on imports from 
the United States). 
60 Department of Revenue, D.O.F. No. 334/3/2004-TRU, 8 July 2004;  and Finance Act 2004, 
Section 93.  For example, if the import duty for a certa in product is 10%, the education cess on that product 
would be 2% of 10%, that is 0.02%. WT/TPR/S/249 Trade Policy Review 
Page 52 
  
 No. of 
lines Effective applied rates 
(MFN) Total duty rate, incl. extra 
chargesa 
Average (%) Range (%) Average (%) Range (%) 
Electric machinery 537 6.7 0-10 22.7 0-26.8 
Transport equipment 244 21.5 0-60 40.4 0-107.1 
Non-agricultural products, n.e.s. 676 8.6 0-10 22.1 0-26.8 
Petroleum 18 8.2 0-10 9.0 5-10.3 
By sectorb      
Agriculture, forestry and fisheries 621 28.8 0-100 36.4 0-111.1 
Mining 232 5.1 0-10 9.1 0-25.6 
Manufacturing 10,474 11.1 0-150 25.3 0-527.4 
Manufacturing excluding food processing 9,605 8.8 0-60 23.6 0-107.1 
a  Calculation for averages with extra ch arges include landing charges,  effective custom duty, additional duty, special additio nal 
duty, and education cess. 
b ISIC Rev.2 classification.  Electricity, gas, and water is excluded (1 tariff line). 
Note:   Calculations exclude specific rates and include the ad valorem part of alternate rates. 
Source :   WTO Secretariat calculations, based on data provided by th e Indian authorities. 
46. Additional cesses are levied on imports and domest ic products for the development of specific 
industries and are not part of the fiscal revenue (Tab le AIII.2).  The authorities noted that these cesses 
are charged as part of the excise duty, thus in the case of imports they are part of the additional duty 
(AD).  The stated objective of the authorities is to  eliminate the cesses once the Goods and Services 
Tax is implemented. 
47. Some imports are also subject to specific duti es.  For instance, imports of high-speed diesel 
oil and petrol (i.e. motor spirits) are subject to a fuel cess (previously the additional excise duty or 
road cess) at a rate of Rs 2 per litre61, to finance the Central Road Fund. (Chapter IV(3)(iv)).62  
According to the authorities, this cess is ch arged as part of the additional duty (AD). 
48. The national calamity contingent duty (NCCD ) is levied on pan masala (HS 2106.90.20);  
some cigarettes and tobacco products (HS 24.02 a nd 24.03);  petroleum oils (HS 2709.00.00);  
telephones for cellular network or for other wire less networks;  and vehicles and motor cycles 
(HS 8703, 8704, 8706, and 8711).63  The NCCD is both specific and ad valorem , ranges from 1% to 
45%, and is also levied on similar domestic products.64 
49. The 2010/11 Budget introduced the "clean energy  cess" (Rs 50/tonne) to be levied on coal, 
lignite, and peat produced in India and imported.65  This cess is to finance the establishment of a 
National Clean Energy Fund to fund research and i nnovative projects in clean energy technologies.  It 
is levied on raw coal (HS 2701), raw lignite (HS 2702), and raw peat (HS 2703) at a rate of 
Rs 50/tonne in addition to any other cess or duties levied on these goods. 
50. The State of Maharashtra levies an entry tax (o ctroi) on entry of do mestic and imported goods 
to the jurisdiction.  The tax is regulated by th e Maharashtra Tax on the Entry of Goods into Local 
                                                      
61 Finance Act 1999. 
62 The special additional customs duty on motor spirit is leviable in accordance with the Finance Act 
2002. 
63 Finance Act 2003, Section 134;  and NCCD Incidence (7th Schedule of Finance Act 2001, as 
amended by the 13th Schedule of Finance Bill 2003 and 8th Schedule of Finance Bill 2008). 
64 NCCD Incidence (7th Schedule of Finance Act 2001, as amended by the 13th Schedule of Finance 
Bill 2003 and 8th Schedule of Finance Bill 2008). 
65 Central Excise Circular No. 01/2010, 24 June 2010. India WT/TPR/S/249 
 Page 53 
 
 
Areas Act 2002, and applies currently to various pe troleum products, tiles, and air conditioners.  Rates 
range from 10% to 34% according to product.  For petroleum products, the rate is mixed (a specific 
component (Rs 1/litre) is added to the ad valorem  rate).  Entry taxes are applied in several states.66 
(vi) Import prohibitions, restrictions, and licensing 
51. Import restrictions may be imposed under Sec tion 3 of the Foreign Trade (Development and 
Regulation) Act 1992 and through notifications, unde r Section 11 of the Customs Act 1962, declaring 
the importation or exportation of any good as prohibite d or restricted.  Import restrictions may be 
imposed for security, self-sufficiency, balan ce-of-payments, health, and moral reasons. 
52. In practice, India links the use of import r estrictions and licensing, and other non-tariff 
measures (NTMs) to domestic policies, for example,  by relaxing NTMs when imports are required to 
alleviate inflation or shortages.  The use of NTMs raises the cost of exporting to India and, in some 
cases, may be equivalent to an import prohibition. 
(a) Import prohibitions 
53. Import prohibitions are generally for health and safety reasons and include a range of 
products from meat and offal of most wild animals,  to animal fats, and ivory and ivory powder.  
During the period under review, certain mobile hand sets and mobile phones have been included in the 
list of prohibited goods (Table III. 9).  For sanitary reasons, India has continued to ban imports of 
certain avian livestock and livestock products67;  and has prohibited imports of milk and milk products 
from China since 2008.68  In addition, imports of rough diamonds from Côte d'Ivoire, as well as some 
products from the Democratic People's Republic of  Korea, Iran, and Iraq are prohibited under UN 
resolutions, as well as imports of rough diamonds (HS 7102.10, 7102.21 or 7102.31) from the Bolivarian Republic of Venezuela under the Kimberly Process Certification Scheme.
69  Imports of 
beef and products containing beef in any form remain prohibited.70 
Table III.9 
Import prohibitions, 2011 
HS No. Description Status since 2007 
0208.90.10 Other meat and edible meat offal of wild  animals, excluding rabbits or hares, primates, 
whales and dolphins, and reptiles Unchanged 
0209.00.00 Pig fat, free or lean meat, and poultry fa t, not rendered or otherwise extracted Unchanged 
0410.00.10 Edible products of wild animal origin Unchanged 
0504.00.31, 0504.00.41 
0504.00.51 Gusts, bladders, and stomachs  of wild animals Unchanged 
Table III.9 (cont'd)
                                                      
66 Entry tax on goods is levied in several states , including Jammu and Kashmir, Himachal Pradesh, 
Rajasthan, Uttar Pradesh, Uttaranchal, Haryana, Punj ab, Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, 
Bihar, Assam, Orissa, Arunachal Pradesh, Chhattisgarh, West Bengal, Maharashtra, Goa, Madhya Pradesh, and 
Gujarat. 
67 Department of Commerce (2010a), Schedule 1:  Import Policy. 
68 DGFT Notifications Nos. 46(RE-2008)/2004-2009, 24 September 2008;  67(RE-2008)/2004-2009, 
1 December 2008;  111(RE-2008)/2 004-2009, 16 June 2009;  22/200 9-2014, 23 December 2009;  and 
49/2009-2014, 24 June 2010;  and No. 16 (RE-2010)/2009-2014, 3 January 2011. 
69 Department of Commerce (2010b). 
70 Under the current Import Policy Schedule (Foreign Trade Policy 2009-14), imports of beef and 
products containing beef in any form are listed as prohibited (under the General Notes Regarding Import 
Policy).  However, meat of bovine animals (fresh, frozen or chilled) are also listed as restricted (i.e. subject to 
licences) under the Import Policy Schedule. WT/TPR/S/249 Trade Policy Review 
Page 54 
  
HS No. Description Status since 2007 
0505.10.10, 0505.90.21 
0505.90.31, 0505.90.91 Feathers, powder, waste, and other parts of feathers, and skins and other parts of wild 
birds Unchanged 
0511.99.99 Natural sponges Unchanged 
0506.10.11, 0506.10.21 
0506.10.31, 0506.10.41 
0506.90.11, 0506.90.91 Bones and horn-cores (crushed and non-crushe d), bone grist, ossein, and bone meal of 
wild animals Unchanged 
0507.10.10, 0507.10.20 Ivory, and i vory powder and waste Unchanged 
0510.00.91 Wild animal products used in pharma ceutical products, excluding bezoar, ox gallstone, 
and placenta Unchanged 
0511.91.10, 0511.91.20 
0511.91.30, 0511.99.21 
0511.99.92 Fish nails and tail, and other fish waste;  sinews and tendons of wild animals;  and 
frozen semen (other than bovine embryo) of wild animals Unchanged 
1501.00.00 Pig fats (including lard) and poultry fat, other than that of Headings Nos. 0209 or 1503 Unchanged 
1502.00.10, 1502.00.20 
1502.00.30, 1502.00. 90 Fats of bovine animals, sheep, or goats, othe r than those of Heading No. 1503, including 
mutton tallow and fasts (unrendered,  rendered or solvent extraction) Unchanged 
1503.00.00 Lard stearin, lard oil, oleostearin, oleo-oil, and tallow oil not emulsified or mixed or 
otherwise prepared Unchanged 
1504.10.99, 1504.20.30, 
1504.20.90, 1504.30.00 Fats and oils of fish or marine mammals, ex cluding cold and squid liver oils;  fish lipid 
oil;  sperm oil;  and other fats a nd oils of fish or marine mammals Unchanged 
1506.00.10, 1506.00.90 Neat-foot oil and fats from bone or  waste, and other animal fats and oils Unchanged 
1516.10.00 Animal fat Unchanged 
1517.10.10, 1517.90.30 Margarine (excluding liquid margarine)  and imitation of lard of animal origin Unchanged 
1518.00.40 Other vegetable oi l and fats, excluding castor oil dehydrated and line seed oil Unchanged 
1522.00.10, 1522.00.20 
1522.00.90 Degrasa and soap stocks Unchanged 
3507.10.11, 3507.10.19 
3507.10.91, 3507.10.99 Animal rennet Unchanged 
4302.19.20 Tiger-cat skins Unchanged 
4303.10.10, 4303.90.10 Ar ticles of apparel and clothing accessories of wild animals covered under the Wild Life 
Protection Act 1972 Unchanged 
8517 Mobile handsets without international mob ile equipment identity (IMEI) number or with 
all zeroes IMEI, and CDMAb mobile phones without electrical serial number 
(ESN)/mobile equipment identifier (M EID) or with all zeroes ESN/MEID Added 
9601.10.00 Worked ivory and articles of ivory Unchanged 
a Residues resulting from the treatment of fatty substances or animal or vegetable waxes. 
b CDMA stands for code division multiple access. 
Source:  Department of Commerce (2010), Schedule 1:  Import Policy, Foreign Trade Policy 2009-2014 , incorporating 
Annual Supplement, 23 August.  Viewed at:  http://dgft.gov.in;  and DGF T online information, "Notifications".  
Viewed at:  http://dgft.gov.in. 
(b) Import licensing71 
54. India applies an import licensing system to administer the importation of restricted items.  
Import licences are administered according to the Foreign Trade (Development and Regulation) Act 
1992 and Foreign Trade (Regulation) Rules 1993.  Licensing requirements may be eliminated without 
legislative approval. 
55. The Import Policy Schedule lists the items that are restricted and items that are restricted with 
a condition.72  Restricted items require a specific import li cence issued by the Directorate General of 
Foreign Trade (DGFT).  Restricted items subject to conditions, require import permits (e.g. sanitary 
                                                      
71 This section is based on the Foreign Trade (Development and Regulation) Act 1992;  Foreign Trade 
(Regulation) Rules 1993;  and WTO documents G/LIC/N/3/IND/9-11, 3 September 2007 to 27 July 2010. 
72 The conditions are stipulated in Department of Commerce (2010a), Schedule 1:  Import Policy, 
which is amended through DGFT notifications from time to time. India WT/TPR/S/249 
 Page 55 
 
 
and phytosanitary permits), in addition to the specific import licence.  It is not clear to the Secretariat 
which products require an automatic licence and which require a non-automatic licence. 
56. Under India's current Import Policy Schedule (Foreign Trade Policy 2009-14), some 422 tariff 
lines at the HS eight-digit level are subject to im port restrictions (up from some 415 tariff lines in 
2007).73  They represent around 3.7% of total tariff lines.   Some 275 tariff lines are restricted while 
some 147 are restricted subject to conditions.  Restri ctions imposed in 2007 under HS sections 1, 2, 5, 
19 (arms and ammunition), and 21 (works of  art), remain unchanged (Chart III.3). 
051015202530
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 TotalChart III.3
Import licensing, by HS section, 2010/11
Per cent of HS section
Source :   WTO Secretariat calculations, based on data provided by the Indian authorities.85
01 Live animals and prod.        
02 Vegetable products03 Fats and oils      
04 Prepared food, etc.
05 Mineral products06 Chemicals and prod.07 Plastic and rubber
08 Hides and skins09 Wood and articles
10 Pulp, paper, etc.
11 Textiles and articles12 Footwear, headgear13 Articles of stones
14 Precious stones, etc.15 Base metals and prod.
16 Machinery
17 Transport equipment18 Precision instruments19 Arms and ammunition
20 Miscellaneous manuf.21 Works of art, etc.80Licensing without condition Licensing under condition
 
57. All importers holding a valid c ode number (IEC) may apply for a licence.  Applications for 
import licences are made to the DGFT or to the regional licensing authority of the DGFT.  The 
licensing authority may refer the application to th e EXIM Facilitation Committee, which consists of 
technical authorities, for assistance to approve a licence.  The practice of routing licence applications 
through sponsoring authorities has b een dispensed with.  The requireme nts for filing applications for 
imports licences are published in the Handbook of Procedures.74 
58. Licences are granted on an MFN basis.  They ar e valid for 24 months and may be revalidated 
for six months by the licensing authority, on merit.  Licences are issued with an "actual user 
condition"75 and are in general non-transferable.76 
                                                      
73 Including Chapter 89, 427 tariff lines at the HS eight-digit level are subject to import restrictions. 
74 Department of Commerce (2010b). 
75 This means that the imported material must be used by the importer and cannot be sold. WT/TPR/S/249 Trade Policy Review 
Page 56 
  
59. Licences are subject to a licence application fee, which varies according to the c.i.f. value of 
imports.77  At the time of the last Review, fees were Rs 2 per shipment of a c.i.f. value of Rs 1,000, 
subject to a minimum fee of Rs 200 and a maxi mum of Rs 100,000.  For electronically filed 
applications, the fee was Rs 1 per shipment for a c.i.f. value of Rs 1,000 with a minimum of 
Rs 200 and maximum of Rs 50,000.78  Imports by the Central Government, state government or any 
department/office of the Government are exempt from the application fees, as are imports to be used 
by educational, charitable or missionary institutions , or for personal use (except vehicles).  Fees are 
not refunded.79 
60. The DGFT or an authorized officer may, in wr iting, refuse to grant, renew, or suspend a 
licence to import (or export) on specific grounds (Box III.1).  Any of these decisions may be 
appealed.  However, in accordance with Indian legisl ation, a licence should not be denied if denial is 
likely to adversely affect trade.80  
Box III.1:  Grounds to refuse to grant or to cancel a licence, 2011 
Grounds to refuse to grant a licence: 
 the applicant has contravened any law relating to customs or foreign exchange; 
 the application for the licence does not substantially conform to any provision of the Foreign Trade 
(Regulation) Rules; 
 the application or any document used to support it contains false, fraudulent or misleading statement; 
 an action against the applicant is pending under the Foreign Trade (Development and Regulation) Act 
1992 or rules and orders made there under; 
 the applicant fails to pay any penalty imposed on him under the Act; 
 the applicant has tampered with a licence; 
 the applicant or any agent or employee of the applicant with his consent has been a party to a corrupt or 
fraudulent practice for the purposes of obtaining any other licence; 
 the applicant is not eligible for a licence if the applicant does not comply with the registration and 
documentation stipulated in the Export and Import Policy; 
 the applicant fails to produce documents called for by the Director General or the licensing authority; 
 in the case of a licence for import, no foreign exchange is available to import; 
 if it has been decided by the Central Government to import through state trading enterprises and 
distribution thereof through special or specialized agencies 
Grounds to cancel a licence: 
 the licence has been obtained by fraud, suppres sion of facts or misrepresentation;  or 
 the licensee has committed a breach of any of the conditions of the licence;  or 
 the licensee has tampered with the licence in any manner;  or 
 the licensee has contravened any law relating to customs or foreign exchange or the rules and regulations 
relating thereto. 
Source: Foreign Trade (Development and Regulation) Act 1992;  Foreign Trade (Regulation) Rules 1993;  and 
 WTO documents G/LIC/N/3/IND/9-11, 3 September 2007-27 July 2010. 
                                                                                                                                                                     
76 The Foreign Trade (Development and Regulation) Act 1992;  and Foreign Trade (Regulation) Rules 
1993. 
77 WTO document G/LIC/N/3/IND/11, 27 July 2010. 
78 WTO document WT/TPR/M/182/Add.1, 20 July 2007;  and Department of Commerce (2010b), 
Appendix 21B. 
79 Foreign Trade (Regulation) Rules 1993. 
80 Foreign Trade (Development and Regulation) Act 1992. India WT/TPR/S/249 
 Page 57 
 
 
61. The goods imported under a licence cannot be e xported without the writte n permission of the 
DGFT.81 
62. Imports of certain goods (24 tariff lines) are s ubject to import restrictions depending upon 
their import price (Table III.10).  These imports are rest ricted (i.e. subject to a licence) when the c.i.f. 
price is lower than the minimum price.  Minimum import prices are set taking into account domestic 
and international prices and quality.82 
Table III.10 
Items whose import is free, subject to minimum import price, 2010/11  
HS code Description Minimum import price 
0802.90.11 0802.90.12 
0802.90.13 
0802.90.19 Betel nuts:  whole 
Betel nuts:  split 
Betel nuts:  ground 
Betel nuts:  other than above Rs 35/kg 
4012.11.00 
4012.12.00 4012.13.00 
4012.19.10 
4012.19.90 Retreaded tyres, of a kind used on motor cars,  
Retreaded tyres:  of a kind used buses or lorries Retreaded tyres:  of a kind used on aircraft 
Other tyres:  for two wheelers 
Other tyres US$175/unit for buses, lorries, bigger size 
vehicles, and light commercial vehicles US$25/unit for passenger vehicles 
4012.20.10 Used pneumatic tyres:  for buses, lorries, and earth moving equipment US$175/unit 
4012.20.20 Used pneumatic tyres:  for passenger automobile vehicles US$25/unit 
6802.10.00 
6802.21.10 6802.21.20 
6802.21.90 
6802.91.00 6802.92.00 Tiles, cubes, and similar articles 
Marble tiles Marble monumental stone 
Other monumental or building stone 
Marble, travertine, and alabaster Other calcareous stone US$50/kg 
6810.11.10 
6810.11.90 
6810.19.10 
6810.19.90 6810.91.00 
 
6810.99.10 6810.99.90 Cement bricks 
Other building blocks and bricks 
Cement tiles for mosaic 
Other articles of cement Articles of cement:  prefabricated structural components for building or 
civil engineering 
Concrete boulder Other articles of cement US$50/kg 
Source:  Department of Commerce (2010), Schedule 1:  Import Policy, Foreign Trade Policy 2009-2014 , incorporating 
 Annual Supplement, 23 August.  Viewed at:  http://dgft.gov.in. 
(c) Import quotas 
63. India maintains import quotas for marble and similar stones (HS 2515.11.00, 2515.12.10, 
2515.12.20, and 2515.12.90) and for sandalwood (HS 4403.99.22).  Quotas are established annually 
and administered on an MFN basis.  There is no maximum limit to be allocated per applicant.  
Applications are examined upon receipt and assessed ac cording the criteria stated in the notifications 
and circulars issued by DGTP on a yearly basis.83  India does not maintain bilateral quotas. 
64. Since the removal of most quantitative restric tions on imports in 2001, a mechanism has been 
set up to monitor imports of items considered to be sensitive.  There are currently some 415 sensitive 
items, compared with 300 in 2007.  Monitored sens itive items include milk and milk products, fruits 
and vegetables, pulses, poultry, tea and coffee, spices,  food grains, edible oils, cotton and silk, marble 
                                                      
81 Foreign Trade (Development and Regulation) Act 1992;  and Foreign Trade (Regulation) Rules 
1993. 
82 Information provided by the authorities. 
83 DFGT Notification No. 36/2009-2014, 31 March 2010;  and DGFT Circular No. 29/2009-2014, 
31 March 2010. WT/TPR/S/249 Trade Policy Review 
Page 58 
  
and granite, automobiles, parts and accessories of motor vehicles, products produced by small-scale 
industries, and other products (b amboos, cocoa, copra, and sugar).84 
65. As of 2010, India may impose quantitative restrictions by notification in the Gazette of India , 
on imports of goods that cause serious injury to  domestic industry, as a result of a safeguard 
investigation (section (viii)).85 
(d) Other import restrictions 
66. Imports of certain items, including motor vehicles86, and second-hand cars (less than 
three-year old)87 must be imported through specified ports (Chennai, Kolkata, and Mumbai for new 
vehicles;  and Mumbai for second-hand cars).  Unti l 2008, imports from Sri Lanka that were subject 
to preferential tariffs (such as tea and garments) ha d to be imported through specific ports (Kochi and 
Kolkata for tea, and Chennai and Mumbai for garments).88 
(vii) State trading89 
67. State trading is used as a policy tool, to ensure, inter alia :  a "fair" return to farmers as well as 
food security;  the supply of fertilizer to farmers;  and that the domestic support price system for kerosene and LPG are properly implemented th rough the importation by a single operator 
(section (4)(iv)). 
68. India maintains state trading for certain agri cultural goods (i.e. some cereals, copra, and 
coconut oil), urea, and petroleum oils (Table III.11).  Seven state-trading companies (STEs) are 
authorized by the DGFT to trade in these goods.  However, under the Foreign Trade Policy 2009-14, 
the DGFT may authorize other companies to import any goods subject to state trading, when STEs are 
not able to supply the market.  The Indian Oil Co rporation continues to have the monopoly on imports 
of natural gasoline liquid (HS 2710.11.20), other na tural gasoline liquid (HS 2710.11.90), and light 
diesel oil (HS 2710.19.40);  other STEs and priv ate companies may market other hydrocarbons 
(Table III.11). 
69. The exclusive right to import (or export) is granted to a state enterprise under the provisions 
of the Foreign Trade Policy 2009-14 (Paragraph 2.11).  Also, under the Foreign Trade Policy, all STEs granted special privileges to import (export) must make such purchase s (sales) in accordance 
with commercial considerations including pr ice, quality, availability, marketability, and 
transportation.  STEs should act in a non-discriminatory manner. 
70. The value of imports by STEs during the period under review is shown in Table III.11.  India 
last filed its STE notification in 2010;  however, the statistics were on STEs imports up to 2006. 
71. STEs also assist India in its goal of "balancing"  Indian imports and expor ts through the use of 
countertrade, which involves an agreement for one country to sell goods to another in exchange for 
goods (perhaps also involving some cash or services)  of an equal value from the second country.  The 
                                                      
84 Department of Commerce online information, "Tra de Statistics:  Imports of Sensitive Items".  
Viewed at:  http://commerce.ni c.in/tradestats/import.asp. 
85 Foreign Trade (Development and Regulation) Amendment Act 2010.   
86 iloveindia.com online information, "Importing Cars in India".  Viewed at:  
http://www.iloveindia.com/cars/imported-cars/index.html. 
87 Imports of second-hand cars over three-years old are prohibited. 
88 Customs Notification No. 52/2008, 22 April 2008. 
89 WTO document G/STR/N/8/IN D, G/STR/N/9/IND, G/STR/N/ 10/IND, and G/STR/N/11/IND, 
6 May 2010. India WT/TPR/S/249 
 Page 59 
 
 
practice is most prevalent between countries th at have foreign exchange constraints or 
balance-of-payments issues.90  India has stated that it has no countertrade requirements, although 
private companies are reportedly "encouraged to  use countertrade" and MMTC Ltd. promotes 
countertrade operations on its website.91  Most recent uses of countertrade by India involved capital 
goods.92  Private companies are encouraged to use c ountertrade.  Global tenders usually include a 
clause stating that, all other factors being equal, preference is given to companies willing to agree to 
countertrade.93 
Table III.11 
Value of imports subject to state trading, 2007-11 
State-trading enterprises Product HS code Import value (Rs million) 
2007/08 2008/09 2009/10 2010/11a 
Food Corporation of India Wheat 1001.10.90, 1001.90.20, 
1001.90.39 26,575.1  0.2  2,317.6  595.6  
Rye 1002.00.90 0.0  0.0  0.0  0.0  
Oats 1004.00.90  82.5   144.7   133.9   28.4  
Maize 1005.90.00  79.6   234.9   574.3   14.0  
Rice 1006.10.90, 1006.20.00, 
1006.30.10, 1006.30.20, 
1006.30.90, 1006.40.00  4.2   5.4   3.7   1.6  
Grain sorghum 1007.00.90 0.0  0.0  0.0  0.0  
Buckwheat, millet, 
canary seed, jawar, 
bajra, ragi, other cereals 1008.10.90, 1008.20.19, 
1008.20.29, 1008.20.39, 
1008.30.90, 1008.90.90  8.2   29.0   33.0   7.1  
State Trading Corporation Copra 120300.00 0.0  0.0  0.0  0.0  
Crude oil (coconut oil 
and its fractions) 1513.11.00 0.0  138.9   392.6  0.0 
Other (coconut oil and 
its fractions) 1513.19.00  352.6   675.3   137.7   0.0  
Indian Oil 
Corporation;  Bharat Petroleum Corporation Ltd.; Hindustan 
Petroleum Corporation 
Ltd.;  Oil and Natural Gas Corporation Ltd.; 
Mangalore Refinery 
and Petrochemicals Ltd.;  Numaligarh Refinery Ltd.;  
Reliance Industries 
Ltd.;  Essar Oil Ltd.;  and Shell India Pvt. Ltd. Special boiling point 
spirits (other than Benzene Toulol) with nominal boiling point 
range 55-115
°Cb 2710.11.11  787.6   6,063.0   6,296.6   2,846.8  
Special boiling point 
spirits (other than 
Benzene, Benzol, 
Toluene, and Toulol) with nominal boiling point range 63-70
°Cb 2710.11.12 0.0  0.0  0.0  0.0  
Other special boiling 
point spirits (other than Benzene, Benzol, Toluene, and Toulol)
b 2710.11.13  0.0  0.1   355.7   540.4  
Other motor spiritb 2710.11.19  5,280.1  12,110.6  11,890.1   8,174.2  
Aviation turbine fuelb 2710.19.20  124.1   326.6   3,939.3   540.5  
High speed dieselb 2710.19.30 86,256.4  103,837.4  67,387.1  24,390.6  
Table III.11 (cont'd)  
                                                      
90 Department of Commerce (2010a). 
91 WTO (2007);  USTR (2009);  and MMTC online information, "MMTC Inside".  Viewed at:  
http://www.mmtclimited.com/frame.php ?url=newsitejewellery/index.htm. 
92 The Economic Times , "Offsets in Indian Defence Sector," 22 May 2009;  FDI Magazine , 
"Countertrade Still Thrives," 8 December 2003;  Indonesian Commercial Newsletter , "Indonesia—India Agrees 
on Counter Trade," 26 March 2002;  and AsiaPulse News , "India to Use 'Counter Trade' to Boost Grain Export," 
25 March 2002. 
93 USTR (2010). WT/TPR/S/249 Trade Policy Review 
Page 60 
  
State-trading enterprises Product HS code Import value (Rs million) 
2007/08 2008/09 2009/10 2010/11a 
Indian Oil Corporation Natural gasoline liquid 2710.11.20  31.2   2.3   0.3  0.0 
Other natural gasoline 
liquid 2710.11.90 161,683.2  155,321.2  34,938.7  13,184.9  
Light diesel oil 2710.19.40  28.6   10.3   8.3   2.5  
Indian Oil Corporation; 
Bharat Petroleum Corporation Ltd.;  Hindustan 
Petroleum Corporation Ltd.;  
IBP;  and State Trading Corporation Superior kerosene oil 2710.19.10 55,830.4  71,914.3  25,688.6  11,545.2  
State Trading Corporation; 
Minerals and Metals Trading 
Corporation;  and Indian 
Potash Ltd. Urea whether or not in 
aqueous solution 3102.10.00 79,445.9  95,876.5   5,549.7   9,464.0  
a April to June. 
b Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corpora tion Ltd., and IBP have been gr anted rights to market these 
 products (Ministry of Petroleum and Natural Ga s, Resolution No. P-23015/1/2001-MKT, 8 March 2002). 
Source:  WTO document G/STR/N/8/ IND, G/STR/N/9/IND, G/ STR/N/10/IND, and G/STR/ N/11/IND, 6 May 2010;  
Department of Commerce (2010), Schedule 1:  Import Policy, Foreign Trade Policy 2009-2014 , incorporating 
Annual Supplement, 23 August.  Viewed at:  http://dgf t.gov.in;  and information provided by the Indian 
authorities. 
(viii) Contingency measures 
(a) Anti-dumping and countervailing measures 
Overview 
72. India's anti-dumping and countervailing legislatio n is contained in the Customs Tariff Act 
1975, as amended by the Customs Tariff (Ame ndment) Act 1995, and the Customs Tariff 
(Identification, Assessment, and Collection of Anti-Dumping Duty on Dumped Articles and for 
Determination of Injury) Rules 1995.  This legislation was notified to the WTO in 1996.94  T h e  
authorities noted that India considers anti-dumping duti es, in particular, and trade remedial measures 
in general, as necessary protection instruments to eliminate injury caused to the domestic industry by 
unfair trade practices.  Interventions are aimed at re-establishing a situation of open and fair 
competition in the Indian market. 
73. Anti-dumping investigations may be initiated by  the Directorate General of Anti-Dumping 
and Allied Duties (DGAD), in the Department of  Commerce, upon a written application by or on 
behalf of domestic industry, or on its  own initiative if there is justification to launch an investigation.  
An application is scrutinized by the DGAD to en sure it is adequately documented and provides 
sufficient evidence for initiation.  If the evidence is not adequate, a "deficiency letter" is issued, 
normally within 20 days of the receipt of the appli cation.  For an investigat ion to be initiated, the 
investigation petitioners must account for at least 25% of total domestic production of the like article;  
and the domestic producers expressly supporting the app lication must account for more than 50% of 
the total production of the like article by those expr essly supporting and opposi ng the application.  In 
accordance with the Indian legislation, dumping per se  is not actionable.  For a petition to proceed, 
the DGAD must verify the accuracy and adequacy of  the evidence provided and determine that there 
is sufficient evidence of dumping or injury (where  applicable), and a causal link between the dumped 
                                                      
94 WTO documents G/ADP/N/1/IND/1, 15 August 1995;  G/ADP/N/1/IND/2/Corr.1, 9 January 1996;  
and G/ADP/N/1/IND/2/Supp l.1, 23 December 1996. India WT/TPR/S/249 
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imports and the alleged injury, before initiating an in vestigation.  In addition, other injury causes have 
to be investigated so that th ey are not attributed to dumping.95 
74. The DGAD informs the government of the exporting  country, and issues a public notice with 
details of the initiation and the time-limits for inte rested parties to provide comments.  The public 
notification is usually issued within 45 days of  receipt of documentation, and the time-limit for 
interested parties to express their views is a furt her 30 days.  A preliminary finding regarding export 
price, normal value, and margin of dumping is norma lly issued in a public notice within 150 days of 
initiation of the investigation.  Following this fi nding, the Department of Revenue may decide to 
impose a provisional duty not exceeding the margin  of dumping.  The provisional duty may be 
imposed only after the expiry of 60 days from the da te of initiation of the investigation.  It may 
remain in force for a period not exceeding six mont hs, extendable to nine months upon the request of 
exporters representing a significant percentage of tr ade.  The final determination is normally made 
within 150 days of the date of the preliminary de termination, and within one year from the initiation 
of the investigation.  This period may be extende d by the Central Government by a maximum of six 
months under special circumstances, which incl ude the complexity of the case and judicial 
interventions by courts. 
75. The margin of dumping for each exporter or producer is determined by the DGAD, following 
which the Department of Revenue may, within th ree months of publication of the final findings, 
impose the anti-dumping duty by notification in the Official Gazette .  Under Indian law, the 
Government is obliged to restrict the anti-dumping du ty to the lower of the margin of dumping or the 
margin of injury.  Anti-dumping duties may remain in place for five years unless revoked earlier or extended by the DGAD.
96 
76. Indian legislation provides for levying anti-dum ping duty retrospectively, where there is a 
history of dumping that caused the injury or when  the injury is caused by massive dumping, in a 
relatively short time, so as to seriously undermine th e remedial effect of an anti-dumping duty.  The 
retrospective application may not go beyond 90 days of the date of imposition of a provisional duty.  
No retrospective application prior to the date of  initiation of an investigation is allowed.  The 
authorities indicated that there has been no retrosp ective application of duties during the period under 
review. 
77. An investigation may be terminated by the DGA D at any time if:  there is a written request 
from or on behalf of the domestic industry at whose instance the investigation was initiated;  there is 
insufficient evidence of dumping or injury;  the inju ry is negligible;  the margin of dumping is less 
than 2% of the export price;  or the volume of the dumped imports is less than  3% of imports of the 
like product, unless the countries accounting for 3% individually account for over 7% collectively of 
imports of the like product. 
78. Rules to initiate and conduct a sunset review (SSR) are contained in Trade Notice No. 1/2008 
of 10 March 2008.97  An SSR may be initiated upon petition of the domestic industry or may be 
self-initiated by the DGAD.  In accord ance with the rules, the DGAD must  issue an alert letter to the 
domestic industry soon after the fourth year in which the anti-dumping measures are in place.  The 
domestic industry must inform the DGAD, within 40 da ys of the dispatch of the letter, whether it 
intends to file an application to extend the anti-dump ing measures.  If so, an application on the need to 
keep the anti-dumping measures in force, must be re ceived by the DGAD at least six months before 
the date of expiry of the anti-dumping measures.  The DGAD may then initiate the SSR on the basis 
                                                      
95 Directorate General of Anti-Dumping and Allied Duties (undated). 
96 Any review of a measure must be concluded within 12 months of initiation of the review. 
97 Department of Commerce online information, "Anti-dumping Trade Notices".  Viewed at:  
http://commerce.nic.in /traderemedies/ad_tradenotices.asp?id=14. WT/TPR/S/249 Trade Policy Review 
Page 62 
  
of the domestic industry's application.  If the DGAD d ecides to self-initiate the investigation, it must 
issue a questionnaire to the domestic industry;  comments must be received by the DGAD within the 
following 40 days substantiating the need for the continued imposition of the anti-dumping measures.  
After receipt of the questionnaire, the DGAD may issu e a letter to other interested parties regarding 
the need to continue or otherwise the AD measur es;  comments must be received by the DGAD within 
40 days of the date of issuance of the letter.  If there is sufficient ground for continuation of the anti-dumping measures (with or without modificati on) after receipt of information from various 
parties, the DGAD may recommend this to the Central Government.  The investigation is closed if 
there is insufficient ground for continuation of th e measure in force.  The new procedures superseded 
all previous instructions or trade notices issued  by the DGAD with regard to sunset reviews. 
79. The DGAD conducts mid-term reviews to ass ess the need for continued imposition of 
anti-dumping duties.  These reviews may be self-initiate d or on request from an interested party and in 
view of changed circumstances.  The review follows the same procedures prescribed for an 
investigation to the extent that they are applicable .  In 2010, a trade notice was issued to clarify the 
initiation of mid-term reviews.
98  The notice indicates that an appl ication for initiation of a mid-term 
review of an anti-dumping duty in force may be ma de to the DGAD by an interested party including 
exporters, importers, domestic producer s, trade representative bodies, firms or institutions, which are 
representative of the domestic industry.  The applicant must submit positive information 
substantiating the need for a review.  The noti ce also indicates that the application for an 
interim/mid-term review may be accepted by the DGAD provided that a reasonable period of time, i.e. at least one year, has elapsed since the imposition of the definitiv e anti-dumping duty by the 
Central Government.  However, the DGAD may review  the need for the continued imposition of the 
duty, where warranted, on its own initiative. 
80. The DGAD is required to carry out a review for determining margins of dumping for any new 
exporter or producer from a country that is subject  to anti-dumping, provided that exporters or 
producers are new and not related to any of the other exporters. 
81. The authorities may suspend or terminate an investigation if the exporter concerned accepts 
an undertaking to revise prices in order to remove th e dumping or the injurious effect of dumping.  No 
undertaking is accepted before a preliminary determin ation is made.  During the period under review, 
a price undertaking was accepted from Sri Lanka in August 2009, as a result of the anti-dumping investigation concerning "Imports of Plain Medi um Density fibre Board from China, Malaysia, 
New Zealand, Thailand, and Sri Lanka". 
82. Anti-dumping duty is not payable on products im ported by units in export-processing zones 
(EPZs) or export-oriented units (
EOUs) , or on products imported by Advance Licence holders (now 
Advance Authorization Scheme, Table AIII.6).99  The final anti-dumping duty paid on imported goods 
used in the manufacture of export goods may be refunded as brand rate of duty drawback in 
accordance with the drawback rules.100 
83. Countervailing measures may be imposed under the Customs Tariff Act 1975 (Part 9) and the 
Customs Tariff (Identification, Assessment and Co llection of Countervailing Duty on Subsidized 
                                                      
98 Department of Commerce, Trade Notice No. 1/2010 of 17 May 2010 introduced clarification 
regarding the initiation of mid-term reviews in terms of Rule 23 of the Anti-dumping Rules (Identification, 
Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury). 
99 Customs Notification No. 41/97, 30 April 1997. 
100 The brand rate of duty drawback comprises the actual taxes to which the exporter was subject.  It is 
calculated after checking the documents for the different duties paid for all inputs and input services used in the 
manufacture of the exported good.  In this fashion, any anti-dumping duty paid on imported goods used in the manufacture of goods for export may be refunded as brand rate of duty, in accordance with the drawback rules. India WT/TPR/S/249 
 Page 63 
 
 
Articles and for Determination of In jury) Rules 1995.  The decision to initiate an investigation must 
be notified through a public notice, with relevant information to be provided by interested parties 
within 30 days of the notice.  Provisional duties may be imposed six months after the date of initiation of the investigation, and may remain in force for a maximum of four months.  Final findings must be 
published by the DGAD within one year  of the date of initiation;  the period may be extended by the 
Central Government in exceptional circumstances, by a further six months.  Definitive countervailing 
measures must be imposed by the Central G overnment on DGAD recommendation within three 
months of the final findings being published.  Fina l measures may remain in force up to five years. 
84. Anti-dumping and countervailing measures may be appealed to the Customs, Excise and 
Service Tax Appellate Tribunal (CESTAT), in accordance with Chapter XV (Section 129) of the 
Customs Act 1962.  The appeal must be filed within  90 days of the final duty being notified by the 
Central Government.
101  Between 2006 and October 2010, 40 appeals were made to the CESTAT, of 
which 7 cases were settled.  In five of the seven  cases, the measures imposed were upheld and the 
appeals rejected;  the appeal was successful in one case;  and the other case was referred back to the 
DGAD.  The CESTAT decision may be appealed to the Supreme Court.  During 2006-10, two 
CESTAT decisions were appealed to the Supreme Court of India:  in one case the decision was 
upheld. 
Measures 
85. India is one of the most active users of anti-dumping measures among WTO Members.  From 
the inception of the WTO until 30 June 2010, India accounted for 436 of the 2,433 anti-dumping 
measures adopted by Members, that is 17.9% of th e total.  During the same period, India initiated 
613 investigations, out of a total of 3,752.  The initia tions affected mainly China (137), Korea, Rep. of 
(47), Chinese Taipei (45), the EU (42), Thailand (36), Japan (30), the United States (29), Indonesia (24), Singapore (23), Malaysia (22), and the Russian Federation (19).
102 
86. Between January 2006 and 31 December  2010, India initiated 209 anti-dumping 
investigations against 34 trading partners, co mpared with 176 reported in its last Review 
(Chart III.4).103  The products involved included chemicals and products thereof, plastics and rubber 
and products thereof, base metals, and tex tiles and clothing.  As at 31 December 2010, 
207 anti-dumping measures were in force,  compared with 177 on 30 June 2006.104  India did not take 
any countervailing actions during this period.  Measures were applied on 30 trading partners.105  The 
majority were applied on China (67 or 32.4% of  the total), Korea, Rep. of (19 or 9.2%), 
Chinese Taipei (19 or 9.2%), Thailand (14 or 6.8%),  the EU or its members states (12 or 5.8%), and 
Japan, Malaysia, and the United States (9 or 4.3% each). 
                                                      
101 For further information, see CESTAT online information.  Viewed at:  http://cestat.gov.in/. 
102 Other countries/territories affected include:  Iran (11), Hong Kong, China (10), Ukraine (10), 
Germany (9), South Africa (9), Brazil (7) (WTO online in formation, "Statistics on anti-dumping".  Viewed at:  
http://www.wto.org/english/tratop_e/a dp_e/ad_meas_rep_member_e.xls;  a nd http://www.wto.org/english/tratop 
_e/adp_e/ad_init_rep_member_e.xls). 
103 Department of Commerce online information, "Anti-Dumping Cases in India".  Viewed at:  
http://commerce.nic.in/trader emedies/ad_casesinindia.asp?id=2&crite ria=&CurrPage=7;  and WTO document 
WT/DAP/N/209/IND, 19 April 2011.  The WTO Members mo st affected by the initiations during the period 
were:  China (56), Korea a nd Thailand (17 each), Chines e Taipei (13), Malaysia (1 2), and the EU, Japan, and 
the United States (11 each). 
104 WTO (2007).   
105 Australia;  Belarus;  Bulgaria;  China;  the EU;  France;  Germany;  Hong Kong, China;  Indonesia;  
Iran;  Japan;  Kingdom of Saudi Arabia;  Korea;  Malaysia;  New Zealand;  Oman;  Qatar;  Russian Federation;  
Singapore;  South Africa;  Sri Lanka;  Sweden;  Switzer land;  Chinese Taipei;  Thailand;  Turkey;  the United 
Arab Emirates;  the United Sates;  and Viet Nam (WTO document G/ADP/N/209/IND, 19 April 2011). WT/TPR/S/249 Trade Policy Review 
Page 64 
  
020406080100120140160180200220240
2006 2007 2008 2009 2010
Source :  Notifications to the WTO.United 
States
5.3
Malaysia
5.7Singapore
2.4EU27
5.3Base metals
and  products thereof
17.2
Korea, 
Rep. of
8.1 China
26.8Other
7.7
Chemicals and products 
thereof
36.8Wood and articles 
thereof   2.4Machinery and
mechanical/electrical 
appliances 
20.6(b) Initiations by product
Per cent(c) Initiations by origin 
Per centChart III.4
Anti-dumping measures, January 2006-December 2010
(a) Number of cases initiated and measures in force
Japan
5.3Middle East
6.2
Plastics and 
rubber
and articles 
thereof
13.4Textiles and their 
articles  4.3
Vehicles, articles 
thereof  1.4
Indonesia
3.8Thailand 
8.1
Chinese Taipei
6.2a    On 31 December.
Russian Federation
2.4Cases initiated 
Measures in forcea
Articles of
stones, mica
1.9
Mineral products
1.9
 India WT/TPR/S/249 
 Page 65 
 
 
87. As of 30 June 2010, the average length of an  anti-dumping measure applied by India was 
56.7 months.  The longest lasting measure was 161 months (acrylonitrile butadiene rubber from 
Korea);  18 duties had been in place for over 10 years, and 81 measures for at least 5 years. 
88. During 2006-10, 113 sunset review s were initiated.  They resulte d in the elimination of the 
measure in 38 cases, and in re-imposition in 57 cases;  the remaining cases were pending as of late 
2010. 
89. No definitive countervailing measure is currently in place (June 2011).  An investigation, with 
respect to imports of sodium nitrite from China,  was initiated in January 2008, but was terminated 
without the imposition of countervailing duties.106 
90. Three of the anti-dumping measures applied by I ndia have been challenged in the DSB;  two 
cases are still pending, and one was settled between the parties.107 
(b) Safeguards 
Legislative and administrative framework 
91. Indian safeguard legislation has been enacted unde r Sections 8B and 8C of the Customs Tariff 
Act 1975, with Section 8C relating specifically to  imports from China.  The Customs Tariff 
(Identification and Assessment of Safeguard Duty ) Rules 1997, and the Customs Tariff (Transitional 
Products Specific Safeguard Duty) Rules 2002, de scribe the procedures for the application of 
safeguard measures.  The authorities have noted that domestic legislation and its implementation 
follow Article XIX of the GATT 1994 and the WTO Agreement on Safeguards. 
92. The Director General (Safeguards), in the Department of Revenue has responsibility for 
hearing the petitions and conduct investigations on  safeguards.  The Director General is also 
responsible for carrying out recommendations unde r the Indo-Singapore Trade Agreement (Safeguard 
Measures) Rules 2009.  A request for a safeguard investigation must be made in writing to the 
Director General, by or on behalf of the dom estic industry.  The Director General may also 
self-initiate an investigation upon information received from any Commissioner of Customs.  If the 
safeguard measures are requested to be imposed for more than a year, details of efforts made or 
planned in order to adjust pos itively to import competition, in cluding details of progressive 
liberalization, must be provided, under the Safe guard Duty Rules 1997.  Thereafter, the Director 
General may initiate an investigation to determine the existence of serious injury or threat thereof to 
the domestic industry, caused by th e import of an article in such increased quantities, absolute or 
relative to domestic production.  A safeguard inv estigation must be completed and notified publicly 
within eight months of initiation of the investiga tion (or within the period allowed by the Central 
Government).  The proceedings of the Standing Boar d on Safeguards are not open to the public.  Its 
views are placed before the Finance Minister for approval in respect of safeguard duties and before 
the Commerce Minister for imposition of quantitative restrictions.108  If the Central Government, after 
                                                      
106 WTO document G/SCM/N/212/IND, 6 September 2010. 
107 WTO document series:  DS318 (India:  anti- dumping measures on certain products from the 
Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu (complainant:  Chinese Taipei)), 
28 October 2004:  still pending, but inactive as at October 2010;  DS306  (India anti-dumping measures on 
batteries from Bangladesh (complainant:  Bangladesh)), 28 January 2004:  settled between the parties in 2006;  and DS304 (India:  anti-dumping measures on imports of certain products from the European Communities 
(complainant:  European Communities)), 8 December 2003:  still open, but inactive as at October 2010. 
108 Directorate General of Safeguards on line information, "FAQ".  Viewed at:  
http://dgsafeguards.gov.in/faq.html. WT/TPR/S/249 Trade Policy Review 
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conducting a safeguard investigation,  is satisfied that any article is imported into India in such 
increased quantities and under such conditions as to cause or threaten to cause serious injury to 
domestic industry, it may, by notification in the Official Gazette , impose a safeguard duty on that 
article.  The Central Government may exempt any ar ticle from payment of the whole or part of the 
safeguard duty upon notification in the Official Gazette .  The notification must include the article 
exempted, the quantity exempted , and the article's origin. 
93. If a request is made for provisional safegua rd measures, full and detailed information 
regarding the existence of critical circumstances and how a delay in applying the measures would 
cause damage difficult to repair needs to be consid ered.  The Director General may record preliminary 
findings in such cases and issue a public notice.  These preliminary findings are placed before the 
Central Government thorough the Board on Safeguards.109  Provisional measures may be imposed by 
the Central Government for up to 200 days. 
94. The duty is levied only during the period necessary to prevent or remedy serious injury and to 
facilitate positive adjustment.  It ceases to have e ffect four years after the date of imposition.  
However, if the Central Government is of the opini on that the domestic industry has taken measures 
to adjust to the injury or threat thereof and that the safegua rd duty remains necessary, it may extend 
the period of imposition, up to a maximum of ten years from first imposition of the duty.  A safeguard 
in place for more than one year must be lib eralized progressively at regular intervals. 
95. Until 2010, safeguard measures could only take th e form of duty surcharges.  The Foreign 
Trade (Development and Regulation) Amendment Act 2010 (No. 25 of 2010) amended India's 
safeguard legislation to allow for the use of  quantitative restrictions as remedy measures.110  The 
amendment allows "the Central Government, after co nducting such enquiry as it deems fit, is satisfied 
that any goods are imported into India in such  increased quantities and under such conditions as to 
cause or threaten to cause serious injury to dom estic industry, it may, by notification in the Official 
Gazette , impose such quantitative restrictions on the im port of such goods as it may deem fit."  The 
quantitative restrictions may not be applied on im ports of goods origina ting from a developing 
country if the share of imports does not exceed 3%;  or on imports of goods originating from more 
than one developing country so long as the aggregate of imports from all countries does not exceed 9% of the total imports of such goods into India.
111 
96. The Director General's (Safeguards) decisi ons on safeguards cannot be appealed under the 
legislation112, but appeals  may be made to the High Court and the Supreme Court.  If the period of 
imposition of a safeguard duty exceeds three years, the Director General must review the situation not 
later than the mid-term of such imposition and, if appropriate, recommend the withdrawal or the 
increase of the liberalization of duty. 
Measures 
97. Initiations of safeguard investigations increased  substantially during the period under review.  
Although no investigations were initiated in 2006 and 2007, and only two were  initiated in 2008, 
13 investigations were initiated duri ng 2009.  A review investigation was initiated in the first quarter 
                                                      
109 Directorate General of Safeguards online information.  Viewed at:  http://www.cbec.gov.in/info-
act/dg/dg-safeguards.htm. 
110 Foreign Trade (Development and Regulation) Amendment Act 2010. 
111 The list of developing countries for the purpose of the Agreement on Safeguards is contained in 
Customs Notifications Nos. 103/98, 14 December 1998;  and 62/99, 13 May 1999. 
112 Directorate General of Safeguards online in formation, "Legal Framework".  Viewed at:  
http://www.dgsafeguards.gov.in/Legal%20Framework.html. India WT/TPR/S/249 
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of 2010 and a new safeguard investig ation (N1, 3-dimethyl butyl-N Ph enyl paraphenylenediamine), in 
December 2010.113  Another new investigation was initiated in the first quarter of 2011. 
98. Over 2007-10, 18 investigations were initiated, some involving more than one of case.  In 
eight  of these cases (seven investigations), th e Director General (Safeguards) recommended the 
application of measures:  in one case (oxo al cohol), the Board on Safeguards rejected the 
recommendation;  in one case, the Director General recommended the application of the safeguard measures for three months;  in another case, for a year ;  in another, for two years;  in two cases, for 
three years;  and in one case, and the Director Ge neral recommended the application of safeguards for 
four years (aluminium products).  In some cases, the Board decided to apply the measure for a shorter 
than that suggested by the Director General.  Th e Board decided to apply the safeguard measure for 
one year in the case of phtalic anhydride instead of  three, and for two years in the cases regarding 
dimethoate, aluminium flat rolled products, and aluminium foil (Table AIII.3).  All safeguard 
measures consisted of an increase in tariffs at the same or lower rates than those recommended by the 
Director General.  No safeguard measures were ap plied in the remaining 11 investigations;  the 
investigation ended due to a withdrawal of the petition in seven cases (four investigations);  the 
Director General recommended that no safeguard measures be applied in seven cases 
(six investigations), and the case initiated in  December 2010 is s till under investigation. 
(ix) Technical regulations and standards 
(a) Standards 
99. According to the authorities, there were no major changes related to the process of 
standardization in India during the review period.   Indian standards are established based on the 
provisions of the Bureau of Indian Standards (BIS) Act 1986 and BIS Rules 1987.  The BIS is responsible for formulating and enforcing standards for 14 sectors.
114  Its role also includes the 
development of activities relating to certificati on of product and quality systems, testing and 
calibration, enforcement, interna tional cooperation, and creating aw areness among consumers.  Other 
agencies are responsible for enforcement of standa rds in other areas (Table AIII.4).  Sectoral 
coordination committees have been established for food processing, power, steel, automotives, 
textiles, and information technology, in order to de velop harmonized standards at the national level.  
The BIS has been placing emphasis on harmonizing nati onal standards with inte rnational and regional 
standards;  thus international standards are of ten adopted as Indian standards under the numbering 
system of ISO/IEC, or are harmonized with interna tional standards in areas of India's trade interests. 
100. The BIS is a member of the International Organization for Standardization (ISO) and 
participates in ISO technical and policy-making committees.115  The BIS is also a member of the 
International Electrotechnical Commission (IEC);  it participates in 73 IEC technical committees and it is an observer in 83.  The BIS has bilateral cooperation memoranda of understanding with the 
                                                      
113 WTO document G/SG/N/6/IND/28, 7 January 2011. 
114 These are:  production and general engineering;  civil engineering (as of 1 January 2011);  chemical 
(15 October 2010);  electro-technical (1  July 2009);  food and agriculture  (9 June 2010);  electronics and 
information technology (1 April 2010);  mechanical engineering (1 April 2010);  management and systems (1 Oct 2010);  metallurgical engineering (6 July 2010);  petroleum, coal, and related products (1 July 2010);  
transport engineering (1 January 2011);  textile (1 Apr il 2008);  water resources (1 April 2010);  and medical 
equipment and hospital planning (1 January 2011) (Bureau of Indian Standards online information, "Composition of Technical Committees".  Viewed at:  http://www.bis.org.in/sf/composition.htm). 
115 BIS holds secretarial responsibilities for five ISO technical committees (leather, cycles, lac, mica, 
and measurement of liquid flows) and for five subco mmittees (spices and condiments, velocity area methods, 
sediment transport, raw hides and skins, and tanned l eather) and participates in  51 technical committees. WT/TPR/S/249 Trade Policy Review 
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national standards bodies of Afghanistan, Bhutan, Braz il, France, Germany, Israel, Mauritius, Nigeria, 
South Africa, the UAE, and the United States.116  It also has an MRA with the national standards body 
of Sri Lanka. 
101. There were around 18,623 Indian standards as at 31 March 2010 and about 84% were 
harmonized with international standards (Table III. 12).  This is a result of the emphasis placed on 
making Indian standards identical to or compatible  with international standards to keep pace with 
India's increasing integration into the global economy. 
Table III.12 
Standards, 2007-10 
 2007/08 2008/09 2009/10a 
Total number of standards in force .. .. .. 
Total number of Indian standards in force 18,470 18,592 18,592 
Per cent equivalent to international standards .. .. 84 
.. Not available. 
a 31 March 2010. 
Source:  Information provided by the Indian authorities. 
102. Indian standards are formulated according to the procedures stipulated in the BIS Rules 1987.  
A preliminary draft standard prepared by expert bodies (generally committee members) is considered 
by the respective technical committee.117  Once the draft is approved by the technical committee, it is 
circulated amongst the various stakeholders a nd posted on BIS website for comments.  Comments 
should be provided within two mont hs.  The technical committee finalizes the draft standard taking 
into account these comments.  The finalized standa rd, its revisions, amendments, and cancellation are 
published in the Official Gazette .  Most standards in India are voluntary, although health and safety 
regulations are mandatory for several products and have evolved into technical regulations. 
(b) Technical regulations 
103. Under the WTO Agreement on Technical Barrier s to Trade, the Ministry of Commerce has 
nominated the BIS as the national WTO-TBT e nquiry point for disseminating information on 
standards, technical regulations, and certifica tion.  The Ministry remains responsible for 
implementing the Agreement.  India accepted the WTO TBT Code of Good Practice in 1995.118  
Between 2002 (India's first notifica tion) and February 2011, India made 41 notifications to the 
TBT Committee, 20 were made during the review period. 
104. Responsibility for the formulation of technical regu lations is with the agency in charge of the 
respective area.  The formulation of a technical regul ation follows a similar process to the formulation 
of a standard.  A draft technical regulation is sent out for comments prior to its adoption by the concerned ministry/department/org anization and publication in the Official Gazette .  Comments must 
be provided within 60 days of the publication of the notice.  The draft technical regulations are also 
notified to WTO Members for comments.  Comment s received on the draft are examined by the 
ministry concerned.  If divergent comments are r eceived, an expert group examines and considers the 
comments and their incorporation in the final version.   The process of finalization of draft regulations 
takes 6 to 12 months, including approval of the comp etent authority, vetting, and translation into 
                                                      
116 Information provided by the authorities. 
117 BIS technical committees compri se manufacturers, consumers, gov ernmental agencies, regulatory 
authorities, experts, and laboratories. 
118 WTO document /TBT/CS/N/26, 29 January 1996. India WT/TPR/S/249 
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Hindi.  The final regulation (via a notification) is published in the Official  Gazette  giving its date of 
implementation;  it is simultaneously notified to the WTO.   Amendments to technical regulations are 
made through a similar process, from time to time, based on industry needs or due to new scientific 
developments, new sanitary and e nvironmental circumstances, and harmonization with international 
standards. 
(c) Certification and conformity assessment 
105. The BIS is the national certifying body.  Conformity assessment procedures are regulated by 
the BIS Act 1986 and the BIS Rules and Regulations  1988.  The Central Government, on grounds of 
public interest, notifies which articles or processes should conform to an Indian standard and should 
bear the BIS certification mark under a licence from BIS.119  Some 81 products are subject to the 
mandatory BIS certification mark.120  As at May 2011 there were more than 1,000 products under 
voluntary certification.121  According to the authorities, the requirements for the use of the BIS 
certification mark are the same for domestic a nd imported products.  Besides the normal product 
certification scheme, the BIS also grants licences to environment-friendly products under a special 
scheme and awards the ECO mark to such products. 
106. Foreign producers who wish to export products subject to mandatory certification must obtain 
a licence from the BIS.  Foreign manufacturers must set up a liaison/branch office in India to obtain a licence if the BIS has not signed a MOU with th e country where the manufactured goods originate.
122  
Otherwise, foreign manufacturers may nominate an authorized representative in India responsible for 
checking compliance with the provisions of the BIS Act 1986, and its Rules and Regulations.  The 
applicant needs to supply the prescribed BIS appli cation along with the application fees.  Fees under 
the Foreign Manufacturers Certification Scheme, in place since 1999, are:  Rs 1,000 for the application, US$300 for processing, US$2,000 for ma rking, and a unit rate fee, which varies 
according to the product.  The BIS licence is granted to the factory address at which the manufacturing takes place and the final product is test ed to assess compliance with the relevant Indian 
standards.  After receiving a licence the user must pay an annual fee of Rs 1,000, as well as a 
quarterly fee for units of production marked.  The latter is fixed according to product. 
107. Licences are initially valid for one year.  They  can be renewed for one or two years upon 
application to the BIS and payment of the required fees.
123  Products are not required to be tested at 
the time of renewing a licence.  However, re gular surveillance through random sampling is 
undertaken during the operation of the licence, by BIS laboratories and in accredited laboratories, to 
ensure standard conformity of certified products.  If the product is found to be in non-compliance, a 
penalty is imposed, which may include stop-marking,  deferment of licence or cancellation of licence.  
India recognizes foreign laboratories under the provisions of the BIS Act 1986.  Once manufacturers (domestic or foreign) obtain a licence, they are allowed to self-mark their products.  Products for 
which the BIS certification mark is mandatory may not  be sold without it during the approval process. 
                                                      
119 BIS Act, Section 14. 
120 For items subject to mandatory certification, see Bureau of Indian Standards online information.  
Viewed at:  http://www.bis.org.in/. 
121 Information provided by the authorities. 
122 Bureau of Indian Standards online information, "Brief of Certification procedure for Foreign 
Manufacturers".  Viewed at:  http://www.bis.org.in/cert/fm.htm 
123 The renewal application fee is Rs 500, the licence fee is Rs 1,000 per year, and there is a minimum 
annual marking fee of US $2,000 and a marking fee based on produc tion marked during the preceding operative 
year of licence payable in U.S. dollars less the amount already paid on a quarterly basis.   WT/TPR/S/249 Trade Policy Review 
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108. In order to implement its certification schemes,  the BIS conducts conformity testing through 
its central laboratory at Sahibabad (near Delhi), and four regional and three branch laboratories.124  
The major areas covered at the central laboratory ar e electrical, mechanical, and chemical (testing), 
and electrical and mechanical (calibration).  BIS laboratories have test facilities for most products 
under the Certification Marks Scheme.  In addition to the BIS laboratories, services are provided by 
115 national laboratories recognized under the BIS Laboratory Recognition Scheme. 
(d) Accreditation 
109. The National Accreditation Board for Testi ng and Calibration Laboratories (NABL), an 
autonomous body under the Departme nt of Science and Technology, is the sole accreditation body for 
testing and calibration laboratories in India.125  NABL is a partner of the Asia Pacific Laboratory 
Accreditation Cooperation (APLAC) Mutual Recogn ition Arrangement and is signatory to the 
International Laboratory Accreditation Cooperation (ILAC).  NABL's accreditation system is in 
accordance with ISO/IEC 17011:2004 (General re quirements for accreditation of bodies accrediting 
conformity assessment bodies).  NABL accredits laboratories that are performing tests/calibrations in accordance with ISO/IEC 17025:2005 (general requi rements for the competence of testing and 
calibration laboratories), and ISO 15189:2007 (parti cular requirements for quality and competence of 
medical laboratories) in the case of medical laborat ories.  These services are accessible to all testing 
and calibration laboratories in India and abroad, rega rdless of their ownership, legal status, size, and 
degree of independence. 
110. Laboratories seeking accreditation must comply with the relevant standards of accreditation 
as well as with NABL's specific requirements, such as successfully completing a proficiency testing 
programme.
126  The accreditation process consists of five stages127;  and accreditation is valid for two 
years.  NABL conducts annual surveillance visits of the accredited laboratories to verify their 
continued compliance with the requirements.  As at February 2011, the NABL had granted 
2,267 accreditation certificates;  a different certificat e is issued for each type of accreditation service 
or category.  Laboratories must apply for renewal of accreditation at least six months prior to the 
certificates' expiration date.  Decision on accreditation may be appealed to the NABL, and may lead 
to an investigation;  the NABL's decision is final.   
111. The BIS runs a Laboratory Recognition Sc heme for BIS product-testing needs for 
certification purposes in line with IS/ISO/I EC 17025:2005 (General Requirements for the 
Competence of Testing and Calibration Laboratorie s).  Once laboratories are recognized under this 
scheme, they are subject to audits to ensure con tinued suitability.  Recognition is granted for three 
years, renewable for similar periods, and there are tw o surveillance visits during this period.  As at 
February 2011, 115 laboratories had been recognized under this scheme. 
(e) Labelling 
112. The Legal Metrology Act 2009 and the Le gal Metrology (Packaged Commodities) 
Rules 2011 implemented as of 1 April 2011, replaced the Standards of Weights and Measures 
Act 1976, the Standards of Weights and Measures (Enforcement) Act 1985, and the Standards of 
                                                      
124 Except for two of the bran ch laboratories, all laboratories are accredited by NABL. 
125 National Accreditation Board for Testing and Calibration Laboratories online information, 
"Introduction".  Viewed at:  http://www.nabl-india.org/nabl/html/about-intro.asp. 
126 Information provided by the authorities. 
127 For more information, see National Accreditati on Board for Testing and Calibration Laboratories 
online information, "Laboratory Accreditation".  Viewed  at:  http://www.nabl-india.org/nabl/html/about-lab-
acc.asp. India WT/TPR/S/249 
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Weights and Measures (Packaged Commodities) Ru les 1977, which regulated labelling requirements 
in India.  According to the authorities, labelling re quirements are uniform across all states and for all 
foreign suppliers. 
113. Packaged commodities must bear a label securely affixed.  These labels should include the:  
name, trade name or description of food contained in the package;  ingredients used;  name and 
address of manufacturer or importer;  net weight or measure of volume (in accordance with the metric system based on the international system of units) of  contents;  item/package sale price (MRP Rs __) 
(inclusive of all taxes);  month and year of  manufacture or packaging;  date of expiry
128;  licence 
number where relevant;  and name, address or e-mail if  available of person or office to be contacted in 
case of a complaint.129  For products containing natural flavouring substances, the common name of 
the flavours should be mentioned on the label.  The label should also indicate the animal origin of 
gelatine in products that contain it.  The Ministry of Health and Family Welfare has recently notified 
the quantitative ingredient declaration requirement as an additional labelling requirement for food.  
More specific labelling requirements exist for specifi ed products, such as infant milk substitutes and 
infant foods, bottled minera l water, and milk products. 
114. Labels must be in Hindi (Devnagiri script) and in English.  In certain instances, they must be 
written in the language of the locality where the product is ultimately sold.  This increases distribution 
costs, since India has 16 official languages, a nd food-processing companies often do not know which 
pallet of food products will be trans ported to a specific State.  The requirement that packaging must 
specify the maximum retail price of the product, incl uding taxes, is a further complication, since sales 
taxes are levied at the state level. 
115. Currently there is no mandatory labelling re quirement for genetically modified (GM) 
products.  However, legislation is in the pipeline:  the Ministry of Health and Family Welfare has 
proposed comprehensive labelling requirements fo r GM foods, requiring all packages of food/food 
ingredients of GM origin, that are subject to the approval of the Genetic Engineering Approval 
Committee (GEAC), to bear a label indicating that they are of GM origin, and that the product has been cleared for sale in the exporting country. 
(x) Sanitary and phytosanitary measures (SPS) 
116. SPS matters continue to be governed and enfor ced through a number of laws and agencies 
(Table III.13).  The main institutions involved in the establishment and implementation of SPS 
measures for food items are the Ministry of Health and Family Welfare, the Department of Animal 
Husbandry, Dairying, and Fisheries;  the Directorat e of Plant Protection, Quarantine and Storage;  the 
Bureau of Indian Standards;  and other state government agencies. 
117. India has nominated three institutions as national enquiry points under the WTO SPS 
Agreement:  the Department of Animal Husbandry,  Dairying, and Fisheries for animal health and 
related issues;  the Department of Health for food -safety related issues and plant protection;  and the 
Department of Agriculture and Cooperation for plan t health or phytosanitary issues.  Between 1996, 
when its first SPS notification was submitted, and Fe bruary 2011, India made 71 notifications to the 
Committee on SPS Measures, 22 of which during the review period, includ ing measures on:  food 
items including processed food;  pet f ood products of animal origin;  plants and plant materials;  food 
packaging materials;  horns/hooves of animals;  meat and meat pr oducts;  milk and milk products;  
food additives;  maximum residues limits (MRLs) of different pesticides in car bonated water;  MRLs 
of pesticides on different food commodities;  pre-pack aged food;  and food safety and standards rules. 
                                                      
128 For products containing aspartame, it should not be more than three years from the date of packing. 
129 Legal Metrology (Packaged Commodities) Rules 2011. WT/TPR/S/249 Trade Policy Review 
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Table III.13 
Sanitary and phytosanitary legislation, 2011 
Legislation Description Implementing institution 
Prevention of Food 
Adulteration Act 1954 Aims to protect consumers against th e supply of adulterated food.  It 
specifies minimum quality level standards for various food products.  
The Act is mandatory;  infringement may lead to fines and 
imprisonment Central Committee for Food 
Standards under the Directorate 
General of Health Services 
(Ministry of Health and Family Welfare) 
Essential Commodities Act 1954 Regulates the manufacture, commer ce, and distribution of essential 
commodities, including food.  A numb er of control orders have been 
formulated under the provisions of this Act Central and state government 
agencies  
Fruit Products Order 
1955 Regulates the manufacture and distri bution of all fruit and vegetable 
products, sweetened aerated wate rs, and vinegar and synthetic 
syrups.  The manufacture or re-labelling of products require a 
licence from the Ministry for Food Processing Industries, which is 
granted when the quality of products, sanitation, personnel, machinery, and equipment and work  area standards are satisfactory Ministry for Food Processing 
Industries 
Solvent Extracted Oils, De-oiled Meal, and Edible Four Control 
Order 1967;   
Vegetable Products Control Order 1976 These orders control the production and distribution of solvent 
extracted oils, de-oiled meal, edible flours, and hydrogenated vegetable oils (vanaspati).  Pr oduction and distribution of the 
above-mentioned products require a licence, which is granted when 
products conform to the specifications laid down in the schedules.  The Directorate also regulates the price of vanaspati Directorate of Vanaspati, 
Vegetable Oils, and Fats under the Department of Food and 
Public Distribution (Ministry of 
Consumer Affairs, Food, and Public Distribution) 
Meat Products Control Order 1973 Regulates the manufacture, quality, and sales of all meat products Directorate of Marketing and 
Inspection under the Department 
of Agriculture and Cooperation 
(Ministry of Agriculture) 
Milk and Milk Product 
Order 1992 Provides for setting up an advisory board to advise the Government 
on the production, sale, purchase, a nd distribution of milk powder.  
Units with installed capacity for handling milk of over 10,000 litres 
per day, or milk products containing milk solids in excess of 500 
tonnes per year, are required to re gister with the Department of 
Animal Husbandry and Dairying Department of Animal Husbandry 
Dairying, and Fisheries (Ministry 
of Agriculture) 
Livestock Importation 
Act 1898 (amended in 
2001) Allows the Central Government to regulate, restricts, or prohibits 
import of animal and animal products into India  Department of Animal 
Husbandry, Dairying, and 
Fisheries (Ministry of Agriculture)  
Destructive Insects and 
Pests Act 1914 Regulates import of plants to prevent introduction into and the 
transport from one State to another in India of any insects, fungus or other pest that is or may be destructive to crops  Directorate of Plant Protection, 
Quarantine and Storage (Ministry of Agriculture)  
Plant Quarantine 
(Regulation of Import into India) Order 2003 It regulates the import of plants and plant materials Plant Quarantine Division in the 
Ministry of Agriculture   
Standards on Weights and 
Measures (Packaged 
Commodities) Rules 1977 They lay down certain obligatory conditions for all commodities in 
packed form, with respect to d eclarations on quantities contained Directorate of Weights and 
Measures under Department of 
Consumer Affairs (Ministry of Consumer Affairs, Food, and 
Public Distribution) 
Source:  Information provided by the Indian authorities. 
118. India has not notified the WTO regarding the recognition of equivalence of other countries' 
SPS measures. 
119. In August 2006, the Central Government passed the Food Safety and Standards (FSS) Act of 
2006 to consolidate separate laws130, and to establish the Food Safety and Standards Authority of 
India (FSSAI).  According to the authorities, this law has been notified (Chapter II(2)(i)).  However, 
                                                      
130 These laws include:  the Prevention of Food Adulte ration Act 1954;  the Fruit Products Order 1955;  
the Meat Food Products Order 1973;  the Vegetable Oil Products (Control) Order 1947;  the Edible Oils 
Packaging (Regulation) Order 1988;  the Solvent Extract ed Oil, De-Oiled Meal and Edible Flour (Control) 
Order 1967;  and the Milk and Milk Products Order 1992. India WT/TPR/S/249 
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the rules and regulations to operationalize this Act ha ve not been notified yet.  Once the Food Safety 
and Standards Regulations, 2010 and Rules 2011 are notified, the Food Safety and Standards Act 
2006 will be fully implemented and will repeal some of the separate laws. 
120. The FSSAI also aims to establish a single refe rence point for all matters relating to food 
safety and standards, by moving from a multi-agency to  a centralized system.  To this end, the Act 
establishes an independent statutory authority, th e Food Safety and Standards Authority of India 
(FSSAI), which began operating in July 2008.  The ma ndate of the FSSAI is to ensure the availability 
of safe and wholesome food for human consumption, through establishing and enforcing science-based food-safety standards for domestically produced and imported foods, licensing and 
registering businesses selling food for human co nsumption, and regulating food manufacturing 
practices and labelling.  The various agencies implementing food laws w ill be brought under the 
FSSAI. 
121. Imports of animal products into India requi re sanitary import permits issued by the 
Department of Animal Husbandry, Dairy and Fisheri es;  permits must be obtained prior to shipping 
from the country of origin.  The Department approv es or rejects the application after an import risk 
analysis on a case-by-case basis.  Permits are va lid for six months and may be used for multiple 
consignments.  A sanitary import permit is not a licence, but a cer tificate verifying that India's 
sanitary requirements are fulfilled.  Some imports of animal products also require an import licence 
issued by Director General of Foreign Trade (sec tion (2)(vi)).  Imports of animal products are only 
allowed through designated ports where animal qu arantine and certification services are available 
(Amritsar, Bangalore, Chennai, Delhi, Hyderabad, Ko lkata, and Mumbai).  Imports of fish products 
are allowed through the port of Vishakhapatnam (i n the State of Andhra Pradesh) and the land custom 
station at Petrapole (for imports from Bangladesh only). 
122. Imports of plants and plant materials are regulated under the Destructive Insects and Pests Act 
1914, the Plant Quarantine (PQ) (Regulation of Import into India) Order 2003
131, and international 
conventions.  All plant and plant material consi gnments must be accompanied by a phytosanitary 
certificate issued by the national plant protection organization of the exporting country and an import 
permit issued by the officer in charge of the plan t quarantine station.  Products listed in Schedule VII 
of the PQ Order 2003 may be imported without im port permit but may be required to fulfil other 
conditions, such as fumigation.132  Other phytosanitary requirement s covering some 980 products are 
listed in Schedules V, VI, and VII of PQ Order 2003 (Table III.14).  Schedule IV lists all the plant 
species that are prohibited for import.  As in the case of imports of animal products, imports of plant 
and plant products may only enter the Indian territory through designated ports.133 
123. Plants and seeds that require pos t-entry quarantine are listed in Schedules V and VI of the PQ 
Order 2003.  These plants and seeds have to be grow n in post-entry quarantine facilities established 
by and at the cost of the importer, and approved and certified by the inspection authority.  The 
quarantine period is determined based on the type  of plant materials and time taken by the plant 
material to grow to the stage where symptoms of diseases appear. 
 
                                                      
131 Plant Quarantine (Regulation of Import into India) Order 2003.   
132 Plant Quarantine (Regulation of Import into India) Order 2003, Chapter II (General conditions for 
import (Requirement of Import of Wood and Timber). 
133 For the list of seaports, airports, and land frontiers  in operation through which imports of plants are 
allowed, see Plant Quarantine (Regulation of Import into India) Order 2003, Schedule I. WT/TPR/S/249 Trade Policy Review 
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Table III.14 
Plant quarantine, 2011 
Schedule 
No. Description No. of products 
covered 
IV List of plants/planting materials and countri es from where imports are prohibited along with 
justifications 14 
V List of plants and plant materials restricted:  im ports are permissible only with the recommendation of 
authorized institutions with additiona l declarations and special conditions 17 
VI List of plants/plant materials permitted to be  imported with additional declarations and special 
conditions 628 
VII List of plants/planting materials where imports are permissible on the basis of phytosanitary certificates 
issued by the exporting country, the inspection con ducted by inspection authority, and fumigation, if 
required, including all other general conditions 288 
VIII List of quarantine weed species 31 
IX Inspection fees n.a. 
X List of permit issuing authorities for imports of seed s, plants and plant products , and other articles n.a. 
n.a. Not applicable. 
Source:  Plant Quarantine (Regulation of Import into India) Order 2003. 
124. Sampling and testing of consignments to prev ent the risk of exotic pests is undertaken 
according to the International Standards for Ph ytosanitary Measures Guidelines No. 23 and 31.134  If 
commodities are found free from pests, they are cleared for import.  If not, they must undergo fumigation with the accredited fumigation operators according to the Schedules V, VI, and VII of PQ Order 2003.
135  Fumigation is done at the importer's cost.136 
125. Imports of GM food, feed, and organisms, a nd living modified organisms for R&D, food, 
feed, processing in bulk, and environment release  is governed by the Environment Protection Act 
1986 and Rules 1989.  Imports of products containing GM material for industrial production or environmental release are allowed only with the approval of the Genetic Engineering Approval 
Committee (GEAC).  Importers of GM materials for R&D must submit a proposal to the Review Committee for Genetic Modification under the Department of Bio-Technology.  If these GM materials are used for commercial purposes, GEAC approval is also required.  All consignments 
containing products subject to genetic  modification must carry a declaration stating that the product is 
genetically modified.  If it does not, the importer is liable to penal action under the Foreign Trade 
(Development and Regulation) Act 1992.  The GEAC  has accorded one-time approval for imports of 
GM soybean oil derived from round-up-ready soybean for the purpose of consumption after refining.
137 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures 
126. With a few exceptions (Table AIII.1), exporters mu st register with the Directorate General of 
Foreign Trade (DGFT) and obtain an importer-expor ter code (IEC) number to be able to export.138  In 
addition to the IEC, exporters  also need to obtain a business id entification number from the DGFT to 
                                                      
134 Secretariat of the International Plan t Protection Convention (2005) and (2008). 
135 There are 357 registered fumigation agencies for methyl bromide fumigation and 157 for aluminium 
phosphide fumigation. 
136 Fumigation generally takes 24 hours with methyl bromide, and 7 to 10 days with aluminium 
phosphide. 
137 Department of Commerce (2010a), Schedule 1:  Import Policy. 
138 Foreign Trade (Development and Regulation) Act 1992. India WT/TPR/S/249 
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be allowed to file the shipping bill.  The shi pping bill may be processed manually or through the 
electronic data interchange (EDI) system.  Fo r manual submission, supporting documents (e.g. 
invoice, and packing list) must be filed along with the shipping bill.  Under the EDI system, exporters 
must file only a declaration or shipping bill;  no supporting documents are required.139  However, the 
supporting documents must be submitted to Customs at  the time of grant of the "let export" order.140  
The shipping bill may be filed seven days in advance of the presentation of goods to Customs 
(15 days for exports by sea).  About 96% of export documents are processed electronically.141 
127. Once the shipping bill has been processed, goods are examined by Customs before they are 
given a "let export" order.142  Goods subject to export restrictions and quotas must also be 
accompanied by licences from the DGFT (section (v)(b ) below).  If goods are to be exported under an 
export promotion scheme (section (vii)(b) below), this must be declared on the shipping bill.143  A risk 
management system (RMS), already implemented fo r import procedures (section (2)(i)), and expected 
to be operational for exports by June 2009144, had not been implemented as at February 2011.  It will 
be implemented in a phased manner. 
128. The average time for the completion of export procedures is 17 days (down from 27 days in 
2007), which includes 8 days for documents preparation and 2 days for customs clearance and 
technical inspections.  According to World Bank information, export procedures cost on average 
US$945 per container, including documents preparation (US$350) and customs clearance 
(US$120).145 
(ii) Quality control and preshipment inspection 
129. Since 2007, India's quality control and preship ment inspection measures for exports have 
remained broadly unchanged.  Under the Expor t (Quality Control and Inspection) Act 1963, the 
Export Inspection Council of India (EIC) carries ou t quality control and preshipment inspection to 
ensure minimum standards for exports of products  notified under the Export (Quality Control and 
Inspection) Act 1963 and non-notified products.146  The Act empowers the Central Government to 
notify commodities and specify the mi nimum standards for their export.  According to the authorities, 
there are currently over 800 notified products (no products have been notified since 2007).147  T h e  
authorities noted that quality control and preshipme nt inspection measures were simplified during the 
review period.  They currently apply to basmati rice,  black pepper, dairy, eggs, fish and fish products, 
                                                      
139 Department of Valuation online information, "P rocedure for Clearance of  Imported and Export 
Goods".  Viewed at:  http://www.dov.g ov.in/newsite3/clearance_procedure.asp. 
140 Supporting documents include:  invoice, packing list, licence or quota certificate as required; no 
objection certificate as required and certificate of analysis as required. 
141 Chaturvedi (2009). 
142 Department of Valuation online information, "P rocedure for Clearance of  Imported and Export 
Goods".  Viewed at:  http://www.dov.g ov.in/newsite3/clearance_procedure.asp. 
143 WTO (2007). 
144 Chaturvedi (2009). 
145 World Bank/IFC Doing Business online information.  Viewed at:  http://www.doingbusiness.org. 
146 The EIC has five export inspection agencies across India's major cities, supported by 38 sub-offices 
and laboratories.  It has also accred ited external inspection agencies and la boratories (Department of Commerce, 
2009). 
147 A product is notified under the Export (Quality Control and Inspection) Act 1963, based mainly on 
the requirements of the importing countries.  However, the quantity of the product exported and the number of 
foreign complaints are also considered while notifying a product for export.  The minimum standards for export 
of a product are developed based on the standard specified  by major importing countries, national standards, and 
scientific data. WT/TPR/S/249 Trade Policy Review 
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honey, meat and meat products, and pro cessed food products containing red chillies.148  Under the 
Export Policy Schedule (Foreign Trade Policy 2009-14), it appears that preshipment inspection also applies to exports of canned meat products and ma rine species (except those contained in the Wild 
Life (Protection) Act 1972).
149 
130. Export certification is through inspection of consignments or a "systems approach" 
inspection.  The systems approach includes in -process quality control throughout the production 
process, self-certification, and food safety management systems certification (FSMSC).  The FSMSC, which is based on international st andards, applies to fish and fi shery products, eggs, and dairy 
products, which accounted for around 81% of India's certified exports
150 (by value) in 2008/09  (latest 
available data).151  The EIC charges 0.4% and 0.2% of the f.o.b. value of the exports for consignment 
and systems approach inspections, respectively.  Testing of samples is generally free of charge.152  
Other EIC export certificates include health certificat es (for fishery products), authenticity certificates 
(basmati rice), residue certificates (dairy, poultry,  and eggs products), preferential certificates of 
origin, and non-GMO certificates.153  EIC certification has been recognized for a range of food and 
non-food products by Australia, Brazil, China, the EU, Italy154, Japan, the Kingdom of Saudi Arabia, 
Korea, Rep. of, Russia, Singapore, Sr i Lanka, Turkey, the United States, and  Viet Nam. 
(iii) Export taxes, charges, and levies 
131. Export taxes are used as a policy instrument to, inter alia , ensure domestic supply of raw 
materials for higher-value-added industries, promote further processing of natural resources, ensure an 
"adequate" domestic price,  and preserve natural resources.  Ex port taxes for tanned and untanned 
hides, skins, and leathers (except manufactures of  leather) have remained in place since the last 
Review of India in 2007.  Export taxes for iron ores and concentrates (including iron ore fines)155, 
chromium ores and concentrates, and  products of iron and steel (including ferrous waste and scrap, 
flat rolled products, and tubes and pipes) were in troduced in 2009 (Table III.15).  Export taxes are 
sometimes used with other measures to attain shor t-term goals.  For instance, in April 2010 India 
introduced export licensing/EARCs for raw cotton and cotton waste in addition to export taxes for six 
months  to ensure an adequate domestic supply and to c ontain an increase in the price of cotton in the 
domestic market (section (v) below) (Table III.15). 
132. An export cess is collected for the development of a specific industry;  it is consequently 
levied on certain exports for the development of that  industry.  As at 2011, a cess applies to exports of 
shellac and lac-based products, manganese ore,  chrome ore, mica products, and iron ore 
(Table III.16).  The Spices Cess Act 1986 and the To bacco Cess Act 1975 were repealed by the Cess 
                                                      
148 EIC online information, "Export Certification Sy stem:  Pre-shipment Inspection and Certification 
Schemes".  Viewed at:  http://www.eicindia.org/eic/index1.htm. 
149 Department of Commerce (2010a), Schedule 2:  Export Policy. 
150 Certified exports are exports of notified produ cts that have been certified by the competent 
authority. 
151 EIC online information, "Food Safety Management System based Certification".  Viewed at:  
http://www.eicindia.org/eic/index1.htm;  and Department of Commerce (2009). 
152 Department of Commerce (2009). 
153 EIC online information, "Other Services".  Viewed  at:  http://www.eicindia.org/eic/index1.htm;  and 
Department of Commerce (2009). 
154 Italy signed an MoU with the EIC for exports of fish and fishery products (information provided by 
the authorities). 
155 Iron ore pellets have been fully exempt from export duty since 1 March 2011. India WT/TPR/S/249 
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Laws (Repealing and Amending) Act 2006.  The additional export cess, under the Agricultural 
Produce Cess Act 1940, which applied to both of  these products, was also repealed in 2006.156   
Table III.15 
Export taxes, 2011  
Product Rate Implementation/status 
Tanned and untanned hides, skins, and 
leathers (except manufactures of leather) 10%-25% of the f.o.b. value 2007/in force 
Iron ores and concentrates, including iron ore 
fines 20% of the f.o.b. value for iron ores and 
concentrates 
5% of the f.o.b. value for iron ore fines 2009/in force 
Chromium ores and concentrates Rs 3,000 per tonne 1 March 2007/in force 
Ferrous waste and scrap, and remelting scrap 
ingots of iron or steel 15% of the f.o.b. value 1 March 2007/in force 
Raw cotton Rs 2,500 per tonne April 2010/removed in October 2010 
Cotton waste 3% of the f.o.b. value April 2010/removed in October 2010 
Source:  CBEC online information, "Customs Tariff 2009-10:  Part III:  The Second Schedule:  Export Tariff and 
Corresponding Exemption Notifications".   Viewed at:  http://www.cbec.gov .in/customs/cst-0910/ cst-main.htm;  
Government of India Press Information Bureau, Press Release, "FM Announces Fresh Additional Relief Package 
in His Reply to the Debate on Finance Bill 2010", 29 April 2010;  and information provided by the Indian 
authorities. 
Table III.16 
Export cess, 2011  
Product Cess rate 
Shellac and lac based products Rs 2.30 per quintal 
Manganese ore Rs 4 per tonne 
Chrome ore Rs 6 per tonne 
Mica products 3.5% of the f.o.b. value 
Iron ore Rs 1 per tonne 
Note:   The cess on manganese ore, chrome ore, and iron ore is levied under the Iron Ore Mines, Manganese Ore Mines, and Chrome  
Ore Mines Labour Welfare Cess Act 1976. 
Source:  CBEC online information, "Customs Tariff 2009-10:  Part III:  The Second Schedule:  Export Tariff and 
 Corresponding Exemption Notifications ".  Viewed at:  http://www.cbec. gov.in/customs/cst- 0910/cst-main.htm.  
(iv) Minimum export prices 
133. Under the Export Policy Schedule (Foreign Trade Policy 2009-14), India maintains minimum 
prices on exports of onions and basmati rice.  It  maintains minimum prices for onions exported by 
state trading enterprises.  At present, MEPs for oni ons are revised and fixed by an Inter-Ministerial 
Review Committee at the Department of Comme rce (Table II.4).  Bangalore rose onions and 
Krishnapuram onions are subject to export lic ensing and to a minimum export price of 
US$600/tonne.157  The minimum price for exports of basm ati rice, which is set by the DGFT, was 
initially US$1,100/tonne of the f.o.b. value;  it was reduced to US$900/tonne in September 2009.158  
The authorities have indicated that Basmati rice is s ubject to a minimum export price to ensure prices 
and availability in the domestic market. 
                                                      
156 Customs Circular No. 05/2008, 12 March 2008;  and Taxindia online information, "Customs:  Cess 
Act Notification".  Viewed at:  http://www.taxindi aonline.com/RC2/subCatDesc .php3?subCatDisp_Id=1& 
filename=wnew/cus-cess-01.htm. 
157 DGFT Notification No. 36(RE-2010)/2009-2014, 23 March 2011. 
158 DGFT Notification No. 5/2009-2014, 7 September 2009. WT/TPR/S/249 Trade Policy Review 
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134. Although exports of non-basmati rice were prohibi ted at the time of India's last Review, 
exports of the PUSA-1211, a variety of non-basmati ri ce, were allowed, subject to a minimum price of 
US$1,200/tonne of the f.o. b. value until 1 April 2008.159  Exports of non-basmati rice are currently 
prohibited (Table AIII.5), except for certain  varieties subject to quotas and MEPs.160 
(v) Export prohibitions, restrictions, and licensing 
(a) Export prohibitions 
135. Export prohibitions apply mainly for environmen tal, food-security, marketing, pricing, and 
domestic supply reasons;  and to comply with inte rnational treaties.  Since 2007, additional products 
have been subject to export prohibitions, includi ng non-basmati rice, wheat, pulses, and edible oils 
(Table AIII.5). 
136. Although exports of non-basmati rice and wheat are prohibited, the ban does not apply to 
exports of organic non-basmati rice and organic wheat certified by the Agricultural and Processed 
Food Products Export Development Authority (APE DA).  These products are subject to an export 
quota of 10,000 tonnes and 5,000 tonnes per year, respectively.161 
137. Export prohibitions and export quotas are notified on an annual basis;  they are usually in 
place for a specific period, during which they may be subject to changes.  These changes diminish the 
predictability of the regime.  For instance, exports of  edible oils were initially prohibited in 2008, and 
thereafter extended until 30 September 2011, due to  a lack of supply to meet domestic demand.162  
However, this prohibition has been relaxed for br anded consumer packs of oil of up to 5 kg since 
2008, which have since been subject to an export quota of 10,000 tonnes.163  Customs are in charge of 
monitoring the quota.  Also, the prohibition on expor ts of shavings of shed antlers of Chital and 
Sambhar (including manufactured articles)  was relaxed from 8 to 30 September 2009164;  it was a 
one-time relaxation and exports have been prohibited since October 2009.  Exports of pulses have 
been prohibited since 2006 and will rema in prohibited until up to 31 March 2012.165  According to the 
authorities, the prohibition is in place to ensure domestic supply.  Under the Foreign Trade Policy 
2004-09, exports of cement were prohibited as of April 2008, except for exports from the domestic 
tariff area (DTA) to special economic zones (SEZs) for use in SEZs.166  However, exports of cement 
were liberalized by December 2008. 
138. In addition, India bans exports of some pr oducts to the Democratic People's Republic of 
Korea, Iran, and Iraq, under UN resolutions;  and of rough diamonds to the Bolivarian Republic of 
Venezuela, under the Kimberly process.167 
                                                      
159 DGTF Notification No. 37 (RE-2008)/2004-2009, 3 September 2008. 
160 During the 2010-11 monsoon season, an export quota of 125,000 tonnes of non-basmati rice was 
allowed at an MEP of US$850 per tonne. 
161 Export contracts must be re gistered with APEDA prior to shipment (DGFT Notifications 
Nos. 19/2009-2014 and 20/2009-2014, 7 December 2009). 
162 DGTF Notifications Nos. 85(RE-2007)/2009-2014, 17 March 2008;  and 07 (RE-2010)/2009-2014, 
30 September 2010. 
163 DGTF Notifications Nos. 04/2009-2014, 4 September 2009;  and 09(RE-2010)/2009-2014, 
1 November 2010. 
164 DGFT Notification No. 06/2009-2014, 8 September 2009. 
165 DGTF Notifications Nos. 35/2009-2014, 30 March 2010;  and No. 35(RE 2010)/2009-2014, 
23 March 2011. 
166 DGFT Notification No. 5(RE-2008)/2004-2009, 15 April 2008. 
167 Department of Commerce (2010a). India WT/TPR/S/249 
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(b) Export licensing and quotas 
139. Under the current Export Policy Schedule, some 167 lines  (171 lines in 2007) at the 
HS eight-digit level, excluding products of special chemicals, organisms, materials, equipment, and 
technologies (SCOMET), are currently subject to restrictions.168  Products may be exported only if a 
licence is issued by the DGFT. 
140. Export licensing is sometimes used as a policy t ool to ensure the domestic supply of certain 
products.  For example, exports of cotton (HS 5201, 5202, and 5203), excluding cotton yarn (HS 5205, 5206, and 5207), were restricted (i.e. subject to an export licence) from 21 May 2010 to 
30 September 2010.
169  Cotton yarn was subject to a restriction from December 2010 to 
March 2011.170  In addition, exports of cotton and cotton yarn require an export authorization 
registration certificate (EARCs).  EARCs are issued by the Directorate General of Foreign Trade (as 
of December 2010171) only when the domestic supply of cotton is ensured (Table II.4).  For instance, 
no EARCs were granted from 19 April 2010 to 21 May 2010172;  this decision to suspend exports was 
aimed at lowering domestic prices and ensuring a st ock of 5 million bales of cotton for the domestic 
garment and handloom sectors up to the start of the next cotton season (in October).173 
141. Exports of brown seaweeds and sandalwood oil are subject to export quotas set by the DGFT.  
The quota is determined on the basis of domestic dema nd and anticipated producti on.  Only exports of 
wheat products (HS 1001) are subject to a ceiling.  E xports of sugar (by state-trading enterprises) are 
subject to quota under preferential regimes (Table I II.17).  In addition to this quota, the system of 
"export release order" for sugar e xports was reintroduced in 2009.174  Under this system, based on 
domestic demand and supply estimates, the Sugar Dir ectory determines annually the amount of sugar 
that can be exported subject to a "release order".175   
(vi) State trading 
142. State trading of exports has the stated purpose of ensuring better marketing and prices of 
agricultural and minor forest products, grown by  small-scale farmers, as well as to prevent 
fluctuations in domestic prices;  and to ensure supply of kerosene and liquefied petroleum gas (used 
as domestic fuels), and conservation and proper use of some metal ores.176  Since 2007, exports 
through state-trading have also included all va rieties of onions (prohibited for exports from 
December 2010 to February 2011 (Table II.4)),  manganese ores (above 46% manganese (Mn)), and 
beneficated chrome ore fines/concentrates (Table III.17). 
                                                      
168 For the list of SCOMET, see Department of Commerce (2010a), Schedule 2:  Export Policy:  
Appendix 3. 
169 DGFT Notifications Nos. 44/2009-14, 21 May 2010;  and 58/2009-14, 17 August 2010. 
170 DGFT Notifications Nos. 14(RE-2010)/2009-2014, 22 December 2010;  and 40(RE-2010)/2009-14, 
31 March 2011. 
171 DGFT Notifications No. 12(RE-2010)/2009-14, 16 December 2010. 
172 The Economic Times , "Govt suspends registration of raw cotton exports", 20 April 2010;  and  The 
Wall Street Journal , "India Allows Cotton Exports Again", 21 May 2010. 
173 Due to a significant drop in cotton production across the world, several country producers have met 
their shortages by importing raw cotton from India (7% cheaper than the U.S. ra w cotton), hence reducing 
India's stocks sharply until the next cotton season ( The Hindu , "Curbs on raw cotton exports", 20 April 2010;  
and Government of India Press Information Bureau, Press Release, "Ceiling for cotton export", 28 April 2010). 
174 DGFT Policy Circular No. 87(RE-09) 2004-2009, 4 May 2009. 
175 Department of Food and Public Distribution, File No. 3-3/2010-ES, 1 January 2011.  Viewed at:  
http://www.mahasugarfed.org/images/pdf/Sugar%20Export%20-2011.pdf. 
176 WTO document G/STR/N/8/IN D, G/STR/N/9/IND, G/STR/N/ 10/IND, and G/STR/N/11/IND, 
6 May 2010. WT/TPR/S/249 Trade Policy Review 
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143. As for imports, state-trading enterprises (STEs) are granted special privileges to export but 
must act in accordance with commercial considerations and in a non-discriminatory manner.  The 
exclusive right to export is granted to an enterp rise by the DGFT under the provisions of the Foreign 
Trade Policy (Paragraph 2.11).  However, if STEs are not interested in exporting, other exporters may 
approach the DGFT for permission to export.177 
Table III.17 
Exports subject to state trading, 2007-11 
State-trading enterprises Product HS code Exports (tonnes) 
2007/08 2008/09 2009/10 2010/11 
National Agricultural Cooperative 
Marketing Federation of India 
(NAFED) Ltd.;  Maharashtra State Agricultural Marketing Board;  Gujarat Agro Industries Corporation 
Ltd.;  Spices Trading Corporation 
Ltd.;  A.P. State Trading Corporation;  Karnataka State Cooperative Marketing Federation Ltd.;  National 
Cooperative Consumers Federation of 
India Ltd.;  North Karnataka Onion Growers Co-operative Society;  West Bengal Essential Commodities Supply 
Corporation Ltd.;  M.P. State Agro 
Industries Development Corporation;  Karnataka State Produce Processing 
and Export Corporation;  Madhya 
Pradesh State Co-operative Oil Seeds Growers Federation Ltd.;  and Andhra Pradesh Marketing Federation Onion (all varieties), 
including Bangalore rose 
onions and Krishnapuram onions
a 0703 10 10 
0712 20 00 1,067.7 1,697.7  1,705.5  454.0 
Tribal Cooperative Marketing 
Development Federation of India Ltd. Gum Karayab  1301.90.16 0.9 1.0  1.0  0.3 
Indian Sugar Exim Corporation Sugarc Ex 1701.00.00 .. .. .. .. 
Kudremukh Iron Ore Company Ltd. Iron ores concentrate 
prepared by beneficiation 
and/or concentration of low-grade iron ore containing 40% or less of 
iron
d Ex 2601.11.50 290.0 40.0  0.1  0 
Iron ore pelletse Ex 2601.12.10 2,358.5 909.1 287.7  0 
Minerals and Metals Trading 
Corporation Iron ore other than those 
which are free Ex 2601.11.00 66,117.5 67,164.7  100,984.5  21,912.7 
Manganese ores other than 
lumpy/blended manganese 
ore above 46% Mn 2602.00.00 208.4 205.4  289.5  75.0 
Beneficated chrome ore 
fines/concentrates 
(maximum feed grade to be 
less than 42% Cr 2O3) 2610.00.30 
2610.00.40 .. .. .. .. 
Chrome ore lumps with 
Cr2O3 not exceeding 40% 2610.00.30 1.1 103.1  19.8  0 
Low silica, friable ore with 
Cr2O3 not exceeding 52% 
and silica exceeding 4% Ex 2610.00.90 45.4 145.5  150.5  3.7 
Low silica friable/fine 
chromite ore with Cr 2O3 in 
the range of 52-54% and silica not  exceeding 4% Ex 2610.00.90 .. .. .. .. 
Manganese Ore India Ltd. Manganese ores other than 
lumpy/blended manganese 
ore above 46% Mn 2602.00.00 20.5 4.2  3.4  5.5 
Table III.17 (cont'd) 
                                                      
177 Information provided by the authorities. India WT/TPR/S/249 
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State-trading enterprises Product HS code Exports (tonnes) 
2007/08 2008/09 2009/10 2010/11 
Indian Oil Corporation Crude oil 2709.00.00 29.3 56.9  34.6  0 
.. Not available. 
a No quantitative ceilings apply.  Exports are subject to conditio ns of quality laid out by the National Agricultural Cooperati ve 
Marketing Federation of India from time to time.  STEs may i ssue "no objection certificates" and charge shippers a uniform rate  
of 1% of the export value;  they are not allowed to levy othe r charges.  Exports are subject to minimum prices fixed by NAFED.  
b Exports have been free since November 2010. 
c Subject to preferential tariff-rate quotas. 
d Produced by Kudremukh Iron Ore Company Ltd. e Manufactured by Kudremukh Iron Ore Company Lt d. out of own production of concentrates. 
Note: Exports of onions, except Bangalore rose onions and Kris hnapuram onions, which are restrict ed subject to minimum export 
prices, were prohibited in December 2010 for two months until 18 February 2011. 
Source:  WTO document G/STR/N/8/ IND, G/STR/N/9/IND, G/ STR/N/10/IND, and G/STR/ N/11/IND, 6 May 2010;  
Department of Commerce (2010), "S chedule 2:  Export Policy", Foreign Trade Policy 2009-14 , incorporating 
Annual Supplement, 23 August.  Viewed  at:  http://dgft.gov.in;  DGFT onlin e information, "Notifications".  
Viewed at:  http://dgft.gov.in;  and inform ation provided by the Indian authorities. 
(vii) Export support 
144. During the period under review, India did not make any notifications to the WTO regarding 
export subsidies on agricultural products.178 
145. India's latest notification to the WTO Comm ittee on Subsidies and Countervailing Measures 
dates from 2010.179  The tax incentives notified were those provided under the Income Tax Act 1961 
to free-trade zones (Section 10A), and to export- oriented units (EOUs) (Section 10B).  The tax 
deductions for exporters on their profits under sec tion 80HHC of the Income Tax Act 1961, notified 
previously by India have been phased out180;  no deduction under this section has been available since 
2005/06.181 
146. India is an Annex VII (b) Member under the SC M Agreement and as such may maintain these 
export promotion schemes until its per capita gr oss national product (GNP) reaches US$1,000 in 
constant 1990 dollars for three consecutive years.182  In the last three years for which data are 
available (2006-08), the country's gross national income (GNI)183 has remained below US$1,000 in 
constant 1990 dollars.184 
                                                      
178 India's most recent notification on export subsidy commitments dates from 2002 and covers 
1996-97 to 2000-01 (WTO document G/AG/N/IND/3, 1 March 2002). 
179 WTO documents G/SCM/N/186/IND, 18 October 2010;  and G/SCM/N/155/IND and 
G/SCM/N/123/IND, 29 October 2010. 
180 WTO document G/SCM/N/71/IND, 18 October 2001. 
181 Income Tax Act 1961, Section 80HHC (Deduction in respect of profits retained for export 
business). 
182 WTO documents G/SCM/110, 20 October 2003;  and G/SCM/110/Add.1-Add.8, 
3 June 2004-16 June 2011. 
183 The World Bank changed its methodology:  it has stopped classifying countr ies according to GNP, 
and it now classifies them according to GNI.  For more information, see World Bank online information, 
"Methodologies:  Change in Terminology".  Viewed  at:  http://web.worldba nk.org/WBSITE/EXTERNAL/ 
DATASTATISTICS/0,,contentMDK:20451503~menuPK:64133156~pagePK:64133150~piPK:64133175~theSi
tePK:239419~isCURL:Y,00.html. 
184 WTO document G/SCM/110/Add.7, 22 June 2010. WT/TPR/S/249 Trade Policy Review 
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(a) Free-trade zones and export-oriented units (EOUs) 
147. Exports are encouraged through the establis hment of special economic zones (SEZs) and 
export-oriented units (EOUs). 
Special economic zones (SEZs) 
148. SEZs may be set up by the central or state governments or by private developers (including 
foreigners) as joint ventures with the State or fully private.185  The legal framework regulating SEZs at 
the central government level is the SEZ Act 2005 a nd Rules 2006.  Also, some states have enacted 
their own laws and rules to regulate SEZs.186  State SEZ legislation follows the lines of the SEZ Act 
2005.187  All SEZs are under the administrative c ontrol of the SEZ Development Commissioner. 
149. Firms established in an SEZ benefit from sever al incentives subject to generating net foreign 
exchange earnings within five years of operation (Table III.18).  SEZ units are exempt from various 
taxes, including income tax, central sales tax, minimum alternate tax, dividend distribution tax, 
service tax, and from a series of state taxes (i.e. sales tax, stamp duty, and electricity duty) (Table III.18).
188  SEZ units may import all types of goods (including new and second-hand capital 
goods) duty free both from abroad and from the domestic tariff area (DTA).189  Imports and exports 
into/from the SEZ are not subject to routine customs ex amination;  for instance, "let export" orders are 
granted on the basis of self-certification by the SEZ.190  Also, exports of products manufactured in 
SEZs are not subject to compulsory preshipment inspection.191  State trading does not apply to SEZs 
(except for iron ore).192  However, other export measures do appl y to exports from the SEZs, but with 
exceptions.  For instance, minimum export pri ces apply to exports from SEZs only when raw 
materials procured indigenously are exported unprocessed.193 
150. There is no quantitative limit on the amount of SEZs  exports into the DTA.  However, sales 
into the DTA attract all the same duties and charges as any other import. 
151. As at end 2010, India had 374 SEZs with 3, 245 units producing ma nufactured goods and 
providing services and warehousing for a total invest ment of US$43 billion and 644,073 employees.  
During the period under review, exports from SEZs increased from some US$15 billion to 
US$49 billion, in value, accounting for 17% of tota l exports in 2009/10, co mpared with 9.08% in 
2007/08.194  Major exports from SEZs include chem icals and pharmaceuticals, computer and 
electronic software, and gems and jewellery (Table III.19).  Taxes forgone as a result of the benefits 
                                                      
185 SEZ Act 2005, Chapter II;  and Dohrmann (2008). 
186 Dohrmann (2008). 
187 The states that have enacted SEZ Acts are Gujara t, Himachal Pradesh, Tamil Nadu, Uttar Pradesh, 
Haryana, and Punjab. 
188 SEZ Rules 2006, as amended;  SEZ Act 2005;  a nd SEZ online information, "About SEZs:  facilities 
and incentives".  Viewed at:  http://sezindia.nic.in/about-fi.asp. 
189 DTA means an area within India that is outside SEZs, EOUs, electronic hardware technology parks, 
software technology parks, and bio-technology parks. 
190 Self-certification refers to certif ication regarding the sealing of containers or packages of goods for 
export.  The certificate stipul ates that the containers or packages have  been sealed in the presence of a person 
authorized on behalf of the unit (SEZ Rules 2006, as amended, Chapter IV). 
191 Export Inspection Council of India online in formation, "Relaxations".  Viewed at:  
http://www.eicindia.org/eic/qc&i/relaxations.htm. 
192 SEZ Rules 2006, as amended, Chapter IV;  and Department of Commerce (2010a). 
193 SEZ Rules 2006, as amended, Chapter IV. 
194 Information provided by the authorities. India WT/TPR/S/249 
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granted to SEZs have more than doubled betwee n 2007/08 and 2009/10 (from Rs 18 billion to Rs 
39.9 billion).195 
Table III.18 
Incentives granted to SEZ units, 2011  
Duty-free imports/domestic procurement of goods for de velopment, operation, and maintenance of SEZ units 
100% income tax exemption for SEZ units for the first five years,  50% for the next five years, and 50% of the ploughed-back exp ort 
profit for the next five years 
Exemption from minimum alternate tax 
Exemption from the central sales tax 
Exemption from the service tax 
Exemption from the state sales tax and othe r levies (e.g. stamp duty and electricity duty) as extended by the respective state government 
External commercial borrowing by SEZ units up to US$500 million in  one year without any maturity  restriction through recognized  
banking channels 
100% FDI investment through automatic route 
Single-window clearance for central a nd state level approval procedures 
Source:  Department of Industrial Policy and Promotion (2010), National Manufacturing Policy:  A Discussion Paper .  
Viewed at:  http://dipp.nic.in/N MP_DiscussionPaper/NMP _DiscussionPaper_2010.pdf;  SEZ Rules 2006, as 
amended;  SEZ Act 2005;  and SEZ onlin e information, "About SEZs:  faciliti es and incentives".  Viewed at:  
http://sezindia.nic .in/about-fi.asp. 
Table III.19 
Exports from SEZs, 2007-10 
(US$ billion, unless otherwise specified) 
Sector 2007/08 2008/09 2009/10 
Biotech 0.04 0.19 0.10 
Computer/electronic software 0.89 3.61 10.17 
Electronics hardware 2.47 2.90 3.87 
Electronics 0.12 0.08 0.21 
Engineering 0.37 0.69 0.93 
Gems and jewellery 5.11 7.43 9.74 
Chemicals and pharmaceuticals 0.32 1.42 16.44 
Handicrafts 0.01 0.01 0.01 
Plastic and rubber 0.15 0.08 0.15 
Leather, footwear, and sports goods 0.05 0.06 0.10 
Food and agri-industry 0.14 0.07 0.08 
Non-conventional energy 0.03 0.05 0.31 
Textiles and garments  0.29 0. 66 0.74 
Trading and services 4.64 4.18 5.53 
Miscellaneous 0.20 0.75 0.66 
Total 14.81 22.15 49.05 
Percentage share of SEZs exports of  India's total exports  9.1 12.0 27.4 
Source :  Information provided by the Indian authorities. 
152. As a result of the development of SEZs, concer ns have emerged regard ing the acquisition of 
agricultural land for the establishment of SEZs, ta xes forgone, and the conve rsion of DTA industries 
into SEZ units.196  According to the authorities, the acquis ition of waste and barren land would be the 
                                                      
195 Information provided by the authorities. 
196 Department of Commerce (2009). WT/TPR/S/249 Trade Policy Review 
Page 84 
  
first priority to establish SEZs;  single- or doubl e-crop agricultural land may be acquired only if 
deemed necessary.197 
Export-oriented units (EOUs) 
153. The Export Oriented Units (EOUs) Scheme, in troduced in early 1981, complements the SEZ 
scheme.198  EOUs are regulated by the Foreign Trade Po licy.  As in the case of the EPZs, the main 
objectives of the EOU Scheme is to increase expor ts and foreign exchange revenues, promote the 
transfer of latest technologies, stimulate dir ect foreign investment, and generate additional 
employment.  EOUs are similar to EPZs but may be located anywhere in the country.199  Initially, 
EOUs were concentrated mainly in manufacturing (e.g. textiles, food processing, and electronics) but 
currently agri-businesses and firms supplying services also operate under the EOU Scheme. 
154. The minimum investment in an EOU is Rs 10 million.  EOUs are licensed to manufacture or 
provide services for export for an initial period of five years, which may be extended;  they may benefit from tax and other incentives, subject to e xport performance.  Sector-specific requirements are 
stipulated in the provisions of the EXIM  Policy, and vary from sector to sector.
200  EOUs must also 
generate net foreign exchange earnings within five  years of starting operations.  If the unit is not 
NFEE positive, the Development Commissioner is requi red to inform the Central Excise authorities 
for recovery of the proportionate duty.201 
155. As in the case of the SEZs, EOUs are exempt fro m various taxes, including income tax, until 
31 March 2011 (Table III.20).202  EOUs may import all types of goods (including new and 
second-hand capital goods) duty free from the DTA and abroad, and are exempt from routine customs 
procedures both when importing and exporting.  Manufacturing EOUs are exempt from the state trading regime with the exception of  chrome ore/chrome concentrate. 
156. In principle, EOUs are established to export their entire production;  however, subject to 
certain conditions, a specific percentage may be so ld in the DTA upon payment of duties (including 
anti-dumping duties) and taxes, with some exceptions.
203  In general, EOUs may sell in the DTA 
goods and services for up to 50% of the f.o.b. valu e of exports, with the exception of producers of 
gems and jewellery who may sell up to 10% of the f.o.b. value of exports.  Sales into the DTA are 
allowed only with the approval from the Development Commissioner;  if similar goods are exported;  
and if the NFEE conditions have been fulfilled.  Sa les into the DTA are subject to the payment of a 
25% basic customs duty and a 100% additional customs duty, with the exception of pepper and 
marble, which may not be exported to the DTA even upon payment of full duty.204  Goods made of 
indigenous raw materials are subject to the payment of excise duties. 
                                                      
197 If double-cropped agricultural land has to be acquired, it should not represent more than 10% of the 
total land required for SEZs (D epartment of Co mmerce, 2009). 
198 The Electronics Hardware Tech nology Parks (EHTPs), Software Technology Parks (STPs), and 
Bio-Technology Parks (BTPs) Schemes are similar to the EOUs Scheme in terms of requirements and benefits 
(Department of Commerce, 2010a). 
199 Prior to August 2008, locational restri ctions applied (Chapter II(4)(ii)(b)). 
200 Department of Commerce (2010a). 
201 Central Board of Excise and Customs (2011). 
202 Export Promotion Council for EOUs and SEZs, Circular No. 77, 6 July 2009. 
203 DTA means an area within India that is outside SEZs, EOUs, electronic hardware technology parks, 
software technology parks, and bio-technology parks. 
204 Department of Commerce (2010a), Paragraph 6.8(h);  and Central Board of Excise and Customs 
(2011). India WT/TPR/S/249 
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Table III.20 
Incentives granted to EOUs, 2011  
Inputs are exempt from customs duty 
Exemption from customs and central excise  duties on import/local procurement of capita l goods, raw materials, consumables, spar es, 
packing material, etc. 
Reimbursement of central sales tax 
Corporate/income tax holiday until 31 March 2011 
Reimbursement of duty paid on fuels procured from dom estic oil companies as per the rate of drawback 
No import licences are required 
Import of second-hand capital goods are allowed 
Supplies from the DTA to EOUs are deemed exports and are exempt from payment of the excise duty 
50% of production may be sold in the domestic market on paym ent of duty, generally 25%, plus a 100% additional customs duty 
100% FDI investment through automatic route 
Source:  Department of Industrial Policy and Promotion (2010), National Manufacturing Policy:  A Discussion Paper .  
 Viewed at:  http://dipp.nic.in/NMP_DiscussionPape r/NMP_DiscussionPaper_2010.pdf;  and Export Promotion 
 Council for EOUs and SEZs, Circular No. 77, 6 July 2009.  
157. A special licence granted by the Board of Approvals is necessary to set up an EOU to 
manufacture arms and ammunition, explosives and de fence equipment, atomic  substances, narcotics 
and psychotropic substances and hazardous chemical s, distillation and brewing of alcoholic drinks, 
cigarettes/cigars and manufactured tobacco substitutes.   Up to 100% of FDI is allowed in EOUs under 
the automatic route (Chapter II(4)(ii)) in areas where no FDI prohibition applies.205 
158. In 2009/10, India had 2,553 EOUs, manufactur ing goods and providing services, excluding 
trading, which is not allowed.206  During the period under review, exports from EOUs decreased in 
value from some US$42 billion to US$18 billion, acc ounting for 10% of tota l exports in 2009/10, 
compared with 26% in 2007/08 (Table III.21).207  This decline was due to some enterprises 
leaving the EOUs regime.  Exports of chemicals and pharmaceuti cals, the most important products 
exported by EOUs, declined from US$24 billion in  2007/08 to US$4.7 billion in 2009/10.  Taxes 
forgone as a result of the EOU sc heme decreased from Rs 105 billion in 2007/08 to Rs 70 billion in 
2009/10. 
Table III.21 
Exports from EOUs, 2007-10 
(US$ billion, unless otherwise specified) 
Sectors 2007/08 2008/09 2009/10 
Textiles and garments, ya rn 1.73 1.20 0.79 
Computer software 1.20 0.75 0.89 
Electronics hardware 1.15 1.19 0.98 
Engineering goods 4.74 4.14 3.18 
Chemicals and pharmaceuticals 24.02 23.69 4.52 
Leather and sports goods 0.18 0.18 0.17 
Gems and jewellery 2.33 0.93 1.04 
Plastic, rubber, and synthetic 0.38 0.37 0.32 
Foods and agri and forest products 0.93 1.02 0.90 
Table III.21 (cont'd)  
                                                      
205 FDI is prohibited in manufacture of arms and am munition, explosives, atomic substances, narcotics 
and hazardous chemicals, distillation and brewing of alco holic drinks, and cigarettes, cigars, and manufactured 
tobacco substitutes. 
206 Export Promotion Council for EOUs and SEZs online information, "How to set-up an Export 
Oriented Unit".  Viewed at:  http:// www.eouindia.gov.in/eou_settingup.htm. 
207 Information provided by the authorities. WT/TPR/S/249 Trade Policy Review 
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Sectors 2007/08 2008/09 2009/10 
Miscellaneous 5.30 5.01 4.86 
Total 41.96 38.47 17.64 
Percentage share of EOUs exports of  India's total exports  25.7 20.8 9.9 
Note: The figures do not include the export performance of Software Technology Park of India (STPI) units.  
Source :   Information provided by the authorities. 
(b) "Drawback" 
159. The Customs Act 1962 (Sections 74-76), and th e Customs and Central Excise Duties and 
Service Tax Drawback Rules 1995 continue to regula te the drawback system in India.  Under the 
drawback system, exporters are entitled to a refund  of:  the customs duties (including additional 
duties) on imported goods that are exported without transformation (Section 74);  or customs duties, 
central excise duties, and the service tax levied on materials imported or procured locally to manufacture export products (Section 75).  There are two types of drawback:  the "all industry rate" and the "brand rate" for which the refund may be negotiated. 
"All industry" drawback 
160. Under the "all industry" drawback rate, the amount  refunded (i.e. "drawback rate") is usually 
a percentage of the f.o.b. value of exports or a speci fic per-unit value.  For certain products, there is a 
cap or maximum amount that may be refunded.  Dr awback rates are based on different parameters 
including the prevailing price of inputs, standard input-output norms published by the DGFT, share of 
imports in total inputs, and the applied rates of duty.
208  The "drawback rates" and caps are listed in 
the drawback schedule, which is reviewed and revi sed every year taking into account changes in the 
tariff duty rates.209 Customs Notification No. 84/2010 (17 September 2010) introduced the All 
Industry Rates of Duty Drawback Schedule for 2010- 11.  It includes two rates per item depending on 
whether the exporter has already received a refund of  the central excise duty and the service tax under 
the Central Value Added Tax (CENVAT) Credit Rules 2004.210 
161. Under the All Industry Rates of Duty Drawback Schedule 2010-11, drawback rates on, inter 
alia, leather and leather articles (HS chapters 41, 42, and 64), textiles and textile articles 
(HS chapters 50-63), base metals and article of base metals (HS chapters 72-83), bicycles and bicycle 
parts (HS chapter 87), sports goods (HS chapter 95) , and writing instruments (HS chapter 96), have 
decreased compared with those in force in 2009-10.211  To discourage exports, and in line with 
measures taken by the authorities to contain increa ses in the domestic price of cotton, exports of 
cotton yarn (HS 5205, 5206, and 5207) have not been covered by the drawback schedule since 
April 2010.212  Drawback on gold jewellery and parts thereof (HS 7113.01 and HS 7113.02) may only 
be granted to exports by airfreight, post parcel  or authorized courier going through 13 designated 
                                                      
208 Customs Circular No. 35/2010, 17 September 2010. 
209 Customs Notification No. 103/2008, 29 August 2008, introduced the Drawback Schedule for 
2008-09.  The authorities noted that the 2008-09 Drawback Schedule also covered 2009-10. 
210 According to Customs Notification No. 84/2010 (17 September 2010), the Drawback Schedule 
(items and descriptions) is aligned with rates in the Customs Tariff Act 1975 (First Schedule) at the four-digit 
level.  However, it is not aligned at the six- or eight-digit levels.   
211 Customs Circular No. 35/2010, 17 September 2010. 
212 Customs (non-tariff) Notification No. 34/2010, 29 April 2010. India WT/TPR/S/249 
 Page 87 
 
 
customs stations, and after examination.  In a ddition, consignments exported through authorized 
courier are subject to a maximum f.o.b. value of Rs 2 million.213 
"Brand rate" drawback 
162. For all products on which the All Industry Rates of Duty Drawback Schedule indicates a 
drawback rate of "nil", the exporter may claim a "b rand rate" drawback.  The exporter must apply in 
writing to the Commissioner of Central Excise or to the Commissioner of Customs and Central Excise, for the determination of the amount or ra te of drawback, stating the proportion in which 
materials/components/inputs were used in the pr oduction or manufacture of goods, and the duties paid 
on such materials/components, or the tax paid on  input services, in accordance with the Customs, 
Central Excise Duties and Service Tax Drawback Rules 1995 (Rule 6).
214  If the exporter deems that 
the drawback level is too low, e.g. if the amount refunded is less than four fifths of the duties and 
taxes paid on the imported materials used for the manufacture of export products, the drawback rate 
may be adjusted upon request (Customs, Centra l Excise, and Service Tax Drawback Rules 1995 
(Rule 7)).  According to the authorities, the "brand rate" drawback is determined on the basis of the 
actual duty incidence on the inputs used to manufacture the goods exported. 
163. Drawback is not allowed for some specific pr oducts:  at present these are casein, cement, 
cotton yarn, milk and milk products, and rice;  or if  the market price is less than the amount of the 
drawback;  if the drawback due is less than Rs 50;  or if the exported products have benefited from 
other incentives (Box III.2).215  The authorities noted that the drawback is not provided for specific 
export products as a matter of overall policy. 
Box III.2:  Drawback 
Instances in which drawback may not be applied: 
 products have been manufactured partly or wholly  in a warehouse as defined under the Customs Act 
1962 (Section 65); 
 products are manufactured or exported in discharge of export obligations against Advance or 
Duty-free Import Authorizations issued under the Duty Exemption Scheme (Table AIII.6); 
 products are manufactured or exported by 100% export-oriented units (EOUs); 
 products are manufactured or exported by units in free-trade zones or export processing zones or 
special economic zones; 
 products are manufactured or exported availing the benefit of Customs Notification No. 32/1997, 
1 April 1997, which provides exemption from customs duty for materials when imported into India 
to produce exports;  and 
 products are exported under the Duty Entitle ment Pass Book Scheme (Table AIII.6). 
In addition, exports of gold jewellery and parts thereof (HS 7113.01) and articles of gold jewellery and parts 
thereof (HS 7113.02) subject to other export incentives schemes (Table AIII.6), ar e not entitled to drawback. 
Source:  Customs Notification No. 84/2010, 17 September 2010. 
164. If the drawback is not paid within three months  from the date of filing a claim, the exporter 
receives interest in addition to the dr awback (Customs Ac t 1962, Section 75A). 
                                                      
213 Customs Notification No. 84/2010, 17 September 2010;  and Department of Commerce (2010b). 
214 Customs Notifications Nos. 13/2008, 29 August 2008, and 84/2010, 17 September 2010. 
215 Customs Act 1962 (Section 76). WT/TPR/S/249 Trade Policy Review 
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(c) Other duty and tax concessions 
165. In addition to the SEZs and EOUs regimes and th e duty drawback system, India has a number 
of export incentive schemes, some of which are con tingent on value addition and export obligations.  
India's exports concession schemes include:  (i) duty exemption schemes, which allow exporters to 
import inputs (including fuel and oil) duty free;  (ii) duty remission schemes, entitling exporters to a 
refund of customs duty on the inputs used to prod uce exports (post export replenishment/remission of 
duty paid on inputs);  (iii) reward schemes gr anting exporters duty credits;  and (iv) the Export 
Promotion Capital Goods Scheme, wh ich allows exporters to import  capital goods, at concessional or 
zero duty rates, subject to an export obligation.  Special schemes are also  in place for gems and 
jewellery, and for export and trading houses (Table AIII.6).  Income forgone as a result of these 
schemes totalled Rs 312,922 million in FY 2009/10 (Table AIII.7).   
166. The product coverage and the level of c oncession under these schemes changed during the 
period under review and new schemes  were implemented.  Amendments  included:  (i) introduction of 
a zero duty rate under the Export Promotion Capital G oods Scheme;  (ii) increase of the duty credit to 
from 1.25% to 2% of the f.o.b. value of exports under the Focus Product Scheme, and from 2.5% to 
3% of the f.o.b. value of exports under the Focus Market Scheme;  (iii) reduction of the minimum 
value added required to receive be nefits for gems and jewellery from 2%-6.5% to 1.5%-5%;  and 
(iv) the introduction of a 15% minimum value a dded requirement under the Advance Authorization 
Scheme.  Since 2007 two new export incentive schem es have been introduced, the Status Holder 
Incentive Scheme and the Agri Infrastru cture Incentive Scheme (Table AIII.6). 
167. Incentives granted under three schemes that were  phased out in 2006 (i.e. the Duty Free 
Credit Entitlement Scheme for Status Holder, the Duty Free Replenishment Certificate Scheme, and 
the Target Plus Scheme) have been grandfathered (Table AIII.6). 
168. As is the case with other measures, duty concess ions are also used to attain short term 
objectives.  For instance, as of April 2010, dut y concessions granted under the Duty Entitlement 
Passbook Scheme to exporters of cotton yarn were su spended, for six months, to reduce exports in an 
attempt to control the domestic price of cotton. 
(viii) Export promotion and marketing assistance 
169. In addition to tariff concessions and export programmes, the Department of Commerce 
encourages exports indirectly, through a numbe r of schemes.  The Assistance to States for 
Development of Export Infrastructure and Allied Activities Scheme provi des assistance for, inter alia , 
setting up new export promotion industrial park s/zones (including SEZs), and supporting 
infrastructure (e.g. road links to ports, inland cont ainer depots, container freight stations, and power 
supply).  The Marketing Development Assistan ce Scheme supports export promotion activities 
through export promotion councils  (EPCs);  the Market Access Initiative Scheme supports EPCs and 
trade bodies (i.e. chambers of commerce and industries)  that participate in export promotion activities.  
The Department of Commerce also provides support for trade facilitation (e.g. implementation of a 
single window for clearance of goods and e-trading facilities).216  India's 20 EPCs and the five 
Commodity Boards continue to promote exports of specific products.217  Other bodies affiliated to the 
Ministry of Commerce and Industry are also activel y involved in promoting exports through training, 
                                                      
216 Department of Commerce (2009). 
217 EPCs promote exports of textiles;  pharmaceuticals,  chemicals, and cosmetics;  leather;  gems and 
jewellery;  engineering goods and civil construction projects;  plastics;  cashews;  shellac;  and sports goods.  Commodity boards promote exports of tea,  coffee, rubber, spices, and tobacco. India WT/TPR/S/249 
 Page 89 
 
 
organizing trade fairs/exhibitions in India and abroad, and acting as arbitrators in commercial 
disputes.218 
(ix) Export finance and insurance 
170. Export finance is provided primarily by the Export-Import Bank of India (Exim Bank)219, and 
through mandatory annual lending targets for foreign banks (see below).  In order to promote trade 
and investment, the Exim Bank provides Indian exporters with export credits  on a cost-plus basis at 
market-related interest rates.  The Exim Bank also provides finance and export support for export-oriented units (EOUs)
220, and value-added services (e.g. advi ce and marketing support aimed at 
evaluating international risks and export opportuniti es).  The Bank coordinates the work of other 
institutions financing trade (exports  and imports).  The Exim Bank may also provide lines of credit to 
governments and to overseas financial institutions to  enable buyers in those countries to purchase 
goods and services from India;  the terms of these credits are negotiated between the Exim Bank and 
the overseas agency, based on market interest rates usually linked to the LIBOR.221 
171. The Exim Bank also provides various export guarantee schemes and fee-based services to 
support international trade and invest ment, and conducts related research.222 
172. During 2009/10, the Exim Bank approved loans amounting to Rs 388.43 billion, up from 
Rs 267.62 billion in 2006/07.223  The main industrial sectors to which the bank has exposure remain 
textiles and clothing, metals and metal processi ng, and chemicals and petroleum (Chart III.5). 
173. Under the current guidelines on lending to priori ty sectors, foreign banks operating in India 
must reserve 32% of their adjusted net bank credit (ANBC) or credit equivalent amount of 
off-balance-sheet exposure (OBSE) (whichever is higher) for priority sectors, of which 12% of 
ANBC/credit equivalent of OBSE must be loaned to the export sector.  No target is fixed on lending 
to exporters for domestic (pri vate and state-owned) banks.224  The loans may be provided in domestic 
or foreign currency and are at concessional rates of  interest.  As at March 2010, 20.64% of net bank 
credit by foreign banks went to the export sector:  out of 28 foreign banks 24 have achieved the 12% 
target.225 
                                                      
218 These institutions are:  the India Trade Promotion Organization;  the export and development 
authorities for marine products, and for agricultural and processed food;  the institutes for foreign trade, 
packaging, and diamonds;  the Federation of Indian Export Organizations;  the India Brand Equity Foundation;  
and the Indian Council of Arbitration (Department of Commerce online information, "About us:  Autonomous 
Bodies".  Viewed at:  http://commerce.nic.in/aboutus/a boutus_epc.asp;  and Department of Commerce, 2009). 
219 Established in 1982 under the Export-Import Bank of India Act 1981, the Exim Bank is wholly 
owned by the Government of India. 
220 The Bank provides loans, working capital, mark eting support, export product development, export 
facilitation, import finance, and export guarantees to EOUs. 
221 Export-Import Bank of India online information, "About us:  Organization".  Viewed at:  
http://www.eximbankindia.com/organisation.asp. 
222 The guarantees include:  bid bond guarantees ;  advance payment guarantees;  performance 
guarantees;  guarantees for release of retention money;   and guarantee for raising borrowings overseas for 
execution of project export contracts (i nformation provided by the authorities). 
223 Export-Import Bank of India (2010). 
224 Reserve Bank of India, Master Circular No. RBI/2010-11/80, 1 July 2010. 
225 Reserve Bank of India (2010a). WT/TPR/S/249 Trade Policy Review 
Page 90 
  
Chart III.5
Loans by the Export-Import Bank of India, by sector, 2006/07 and 2009/10
Chemicals & dyes
7
Construction
92009/10 2006/07
Metals &
metal processing
7Textiles & clothing
12
Engineering
goods
9Electronics
4
Drugs &
pharmaceuticals
6Agri-based
products
6Capital goods
5
Source :   Data provided by the  Indian authorities.Other
30
Petroleum & 
petrochemicals
5Chemicals & dyes
8
Construction
5
Metals &
metal processing
14Textiles & clothing
11
Engineering
goods
6Auto & auto 
ancillaries
4
Drugs &
pharmaceuticals
6Agri-based 
products
4Capital goods
5Other
28
Petroleum & 
petrochemicals
9Per cent
 
174. Insurance against export credit risk is provided by the Export Credit Guarantee Corporation of 
India Ltd. (ECGC).  ECGC is a state-owned company, under the administrative control of the 
Ministry of Commerce and Industry, registered as  a non-life insurance company under the Insurance 
Regulatory and Development Authority Act.  It pr ovides exporters insurance against commercial or 
country risks;  it also grants guarantees to banks/f inancial institutions, which allows them to offer 
export credit facilities to exporters, on a more liberal basis.226  The ECGC also provides overseas 
investment insurance to Indian companies invest ing in joint ventures abroad through equity or 
loans.227  The ECGC holds 60% of India's total export  credit risk market and covers exports to 
193 countries.228  The authorities noted that the ECGC  does not receive a subsidy from the 
Government.229  The ECGC also operates the National Export Insurance Account (NEIA), which 
covers export credit risk for large long- and me dium-term overseas projects that are commercially 
viable and of national interest (i.e. strategically important from an economic and political point of 
view) but fall beyond ECGC's underwriting capacity.230 
                                                      
226 According to the authorities, "liberal basis" implies that the ECGC cover is expected to provide 
increased comfort to exporters to export and to the banks to finance the exporters, but does not imply 
concessional rates of premium or terms (WTO, 2007). 
227 ECGC online information.  Viewed at:  www.ecgc.in/. 
228 Private insurance companies th at have entered the export cr edit market include New India 
Assurance Company Ltd., Tata AIG General Assuran ce Company Ltd., ICICI Lombard General Insurance 
Company Ltd., and Bajaj Allianz General Insurance Company Ltd (Domain-B online information, "ECGC takes 
on competitors on their own turf", 10 April 2007.  Viewed at:  http://www.domain-b.com/companies/ 
companies_e/export_credit_guarantee_co rporation/20070410_competitors.html). 
229 Information provided by the authorities. 
230 Press Release, "Speech of th e Commerce and Industry Minister  on the Announcement of Trade 
Facilitation Measures", 26 February 2009. India WT/TPR/S/249 
 Page 91 
 
 
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Incentives 
(a) Tax incentives 
175. India provides a number of tax incentives aimed at  promoting investment.  Under the Income 
Tax Act 1961, tax incentives are provided to several  sectors (Section 35AD) and to disadvantaged 
areas.  Section 80IB provides for tax benefits to industrial undertakings in the State of Jammu and Kashmir;  these incentives will be provided for industries set up until 31 March 2012.  Similar 
benefits available for industrial undertakings in the states of Himachal Pradesh and Uttarakhand will 
be phased out in 2012-13 and those provided to indu stries in the North-Eastern states by 2017-18.  
The authorities noted that several tax incentiv e programmes have been phased out since 2007 
(Table III.22).  During the period under review, re venue forgone due to in centives amounted to some 
US$27.94 billion (Table AIII.8). 
Table III.22 
Tax incentives phased out, 2006-10 
Tax incentive Income Tax Act 
1961, Section Date 
Tax deductions provided to cooperative banks  80P 2006/07 
Profit-linked tax deduction provided to compan ies carrying on scientific research and 
development  80IB 2006/07 
Profit-linked tax deduction provided to the busin ess of operating and maintaining a hospital 
in rural areas  80IB 2008/09 
Profit-linked tax deduction provided to the busin ess of laying and operating a cross-country 
natural gas distribution network, incl uding pipelines and storage facilities  80IA 2009/10 
Source:  Information provided by the Indian authorities. 
176. Tax incentives provided under the New Exploration Licensing Policy for the exploration and 
production of crude oil and natural gas under contract s entered into on or afte r 1 January 1999 are still 
in place. 
177. The Income Tax Act 1961 provides additiona l incentives, including for the shipping 
companies (Section 33AC) and deductions for revenu e and capital expenditure (other than for land) 
on scientific research (under Section 35).231  In 2009, a new section (35AD) was introduced in the 
Income Tax Act 1961, which provides investment- linked deduction of 100% of capital expenditure 
(other than on land, and financial instruments) to sectors such as cold-cha in facilities, agricultural 
warehousing and cross-country natural gas and oil pi peline networks.  This incentive was extended to 
the hotel, hospital, and slum rehabilitation sectors in 2010.232 
(b) Other support 
Explicit subsidies233 
178. Direct or explicit subsidies as reported in th e Central Government's annual Budget amounted 
to Rs 1,641.5 billion (2.1% of GDP) in 2009/10, up from Rs 571.3 billion (1.3% of GDP) in 2006/07.
234 
                                                      
231 Income Tax Act 1961, as amended. 
232 Ministry of Finance (2007a). 
233 The term "subsidy" in this section is used as in India's Budget and other official documents, and not 
in the sense of the WTO Agreement on Subsidies and Countervailing Measures. WT/TPR/S/249 Trade Policy Review 
Page 92 
  
179. The bulk of India's explicit subsidies conti nues to be aimed mainly at supporting the 
agriculture sector, to promote food security and redu ce poverty.  As a result, most of the outlays are 
allocated to food and fertilizers (Chart III.6).  Food  subsidies are provided by the Department of Food 
and Public Distribution to meet the difference between actual prices and the central issue prices fixed 
under the Targeted Public Distribution System (T PDS) and other welfare schemes.  The Central 
Government also provides a subsidy to the Food Cor poration of India to keep buffer stocks of wheat 
and rice as a food security measure.  "Other subsid ies", which account for 3% of the total explicit 
subsidies in 2010/11, include market interventi on and price support schemes for agricultural products 
(section (iv) below and Chapter IV(2)).  India cont inues to subsidize indigenous and imported (urea) 
fertilizers.  The scheme was introduced after th e prices of phosphatic and potassic fertilizers were 
decontrolled, with a view to enable farmers to ma intain a proper ratio of nitrogen, phosphorus, and 
potassium, to keep the price of fertilizers under contro l, and to give producers a "reasonable" return on 
investment.  India's farmers also benefit from input support for irrigation water, electricity, diesel, and seeds. 
Chart III.6
Explicit subsidies, 2006/07 and 2010/11
Petroleum  4.7
Food
42.02010/11 2006/07
Total:  Rs 571.3 billion Total:  Rs 1,641.5 billionIndigenous
urea fertilizers
22.1Decontrolled 
fertilizersa
18.0
Interest rates  4.9
Other  2.4Imported urea
fertilizers
5.7
Source :  Ministry of Finance (2010), Expenditure Budget:  Volume I:  Non-Plan Expenditure,  Union Budget 2010-2011 .
Viewed at: http://indiabudget.nic.in [23 May 2011].Petroleum 
23.4
Food
36.9Indigenous
urea fertilizers
9.2Decontrolled 
fertilizersa
20.4
Other  3.0 Imported urea 
fertilizers
3.9Interest rates  3.2Per cent
a              Sale of decontrolled fertilizers with concessions to farmers.
 
180. Subsidies for domestic liquefied petroleum gas and kerosene under the Public Distribution 
System (PDS), and for freight235, were put in place in 2002 after the dismantling of the administered 
pricing mechanism (APM), with the aim of protecting the poor. 
Credit policies 
181. The Central Government allocates funds to subsid ize interest rates, including to exporters 
(Table III.23).  Under these schemes, which are ma naged by different ministries (e.g. Ministry of 
Finance, and of Heavy Industries and Public En terprises) central public sector enterprises (CPSEs) 
also have access to credit at preferential rates.  In formation is neither ava ilable regarding the amount 
                                                                                                                                                                     
234 Ministry of Finance (2011b). 
235 Freight Subsidy (For Far-flung Areas) Scheme 2002. India WT/TPR/S/249 
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of credit provided at preferential rates or subsid ized rates for each sector nor on the CPSEs which 
benefit from preferential interest rates. 
Table III.23 
Preferential interest rates to exporters, 2007-11  
Period  Sector Interest rate 
Subsidy Floor rate 
01.04.2007 to 
30.09.2008 Textiles (including handlooms, jute, and carpets), readymade garments, leather 
products, handicrafts, engineering produc ts, processed agricultural products 
(including cashew, coffee, and tea), marine products, sports goods, toys, solvent extracted de-oiled cake, plastics and linoleu m, man-made fibre, and exporting small 
and medium enterprises (SMEs) 2 percentage 
points 7% 
Leather and leather manufactures, mari ne products, and textiles (including 
readymade garments and carpets but excl uding man-made fibre and handicrafts)  4 percentage 
points 7% 
01.12.2008 to 
31.03.2010 Textiles (including handloom), handicrafts, carpets, including readymade garments 
and carpets but excluding man-made fibre a nd leather, gem and jewellery, marine 
products, and exporting SMEs  2 percentage 
points 7% 
01.04.2010 to 
31.03.2011 Handicrafts, carpets, handlooms, textiles,  engineering goods, leather and leather 
manufactures, jute and floor covering, and exporting SMEs 2 percentage 
points 7% 
Source:   Information provided by  the Indian authorities. 
182. India sets targets for priority-sector lending to ensure that banks provide credit to specific 
sectors.236  Domestic and foreign commercial banks are required to reserve a percentage of their 
adjusted net bank credit (ANBC) or credit equiva lent amount of off-balance-sheet exposure (OBSE), 
whichever is higher, for priority sectors.  Domes tic banks must reserve 40% of their ANBC/OBSE to 
lend to priority sectors and foreign banks 32% of their ANBC/credit equivalent of OBSE to priority 
sectors, out of which 12% must be channelled to ex ports (Table III.24).  In 2009/10 public, private 
domestic, and foreign banks exceeded these targets,  reaching 41.7%, 46%, and 35.1%, respectively;  
24 out of 27 public banks, 20 out of 22 private domes tic banks, and 24 out of 28  foreign banks met the 
target (Chapter IV(3)(ii)(a)).237 
183. Subsidies are also provided to regional rura l banks, cooperative banks , and public sector 
banks to provide short-term credit to farmers at pr eferential rates (Chapter IV(2) and (3)(ii)).  For 
example, in 2009/10, the Central Government provi ded a subsidy of 2 percentage points on its own 
loans to public sector banks, to provide short-term  production credit to farmers, of up to Rs 300,000 
per farmer, at an interest rate of 7%.238  If farmers reimbursed their loans within one year, an 
"additional subsidy" was granted to public banks so  that they would reduce the interest rate by a 
further 1 percentage point, bringing the interest rate  down to 6%.  In 2010/11, the interest rate subsidy 
is at 1.5% and the "additional subs idy" was increased to 2 percentage  points, lowering the effectively 
paid interest rate by farmer to 5%.239  The funds allocated to this scheme amounted to Rs 70.5 billion 
during 2006/07-2009/10.  Apart from this subsidy gr anted by the Central Government, farmers may 
benefit from other subsidized interest rate at the state level. 
                                                      
236 The general categories of priority  sectors are:  agriculture (direct  and indirect finance), micro and 
small enterprises (direct and indirect finance), micro credit, and education and housing loans (Reserve Bank of 
India, Master Circular No. RBI/2010-11/80, 1 July 2010). 
237 Reserve Bank of India (2010a), pp. 89-90. 
238 The nominal prime lending rate was 11%-12% for 2009/10 (Chapter I) (Reserve Bank of India, 
2010c). 
239 Ministry of Finance (2009) and (2010c). WT/TPR/S/249 Trade Policy Review 
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Table III.24 
Targets for lending to priority sectors, 2011 
Priority sectors Domestic commercial banks Foreign banks 
Total advances to priority 
sectors 40% of the adjusted net bank credit (ANBC) or 
credit equivalent amount of off-balance-sheet 
exposure, whichever is higher 32% of ANBC or credit equivalent amount of 
off-balance-sheet exposure, whichever is higher 
Agriculture 18% of ANBC or credit equivalent amount of 
off-balance-sheet exposure, whichever is higher No target 
Micro and small 
enterprises (MSEs) 12% of ANBC or credit equivalent amount of 
off-balance-sheet exposure, whichever is higher 10% of ANBC or credit equivalent amount of 
off-balance-sheet exposure, whichever is higher 
Micro enterprises 
within MSEs 60% of advances to MSEs should go to micro 
enterprisesa Same as for domestic banks 
Export credit No target 12% of ANBC or credit equivalent amount of 
off-balance-sheet exposure, whichever is higher 
Weaker sectionsb 10% of ANBC or credit equivalent amount of 
off-balance sheet exposure, whichever is higher No target 
Differential Rate of 
Interest (DRI) Schemec 1% of total advances outstanding as at the end of 
the previous year.  At least 40% of the total 
advances should go to scheduled caste/scheduled 
tribes.  At least two third of advances should be 
granted through rural and semi-urban branches No target 
a Advances to micro enterprises amount to 50% of the total adva nces to MSEs in 2010-11.  They will be increased to 55% in 
2011-12 and 60% in 2012-13. 
b Weaker sections include, inter alia , small and marginal farmers;  artisans, a nd village and cottage i ndustries;  scheduled 
castes/scheduled tribes;  and beneficiaries of th e Differential Rate of Interest (DRI) Scheme. 
c The DRI Scheme applies to borrowers w ith annual family income of Rs 18,000 in rural areas and Rs 24,000 in urban areas. 
Source:  Reserve Bank of India, Master Circ ular No. RBI/2010-11/80, 1 July 2010;  and Reserve Bank of India, Master 
Circular No. RBI/2007-2008/279, 10 April 2008. 
Micro and small enterprises 
184. Support is also provided to micro and small enterprises (MSEs).  Historically, in India a 
number of products have been reserved for exclusiv e manufacturing by MSEs.  Products are eligible 
for reservation if manufacturing by MSEs is economically viable and technically feasible.240  MSEs 
accounted for around 39% of India's manufacturing output and 33% of exports (in value) at 
end-March 2009.241  However, the reservation policy, which has limited  competition in reserved 
industries, has reportedly hindered competitiveness among MSEs.  A recent study shows that MSEs 
continue to use obsolete technolog y, attract unskilled labour, have in efficient management, and face 
challenges such as marketing bottle necks and poor infrastructure.242  This lack of policy success may 
have been one of the reasons why there h as been a progressive de-reservation of products.243  The 
reservation/de-reservation of pr oducts is reviewed regularly by the Advisory Committee on 
Reservation, under the Ministry of Micro, Small, and Medium Enterprises (MSMEs).  The trend towards de-reservation accelerated substantially during the period under review:  at present, 
20 products are in the reserved category,  down from 236 in May 2006 (Table III.25). 
                                                      
240 Department of Industrial Policy and Promotion (2009a);  and Development Commissioner online 
information, "List of items reserved for exclusive manufacture in micro and small enterprises".  Viewed at:  http://www.dcmsme.gov.in/publicatio ns/reserveditems/resvex.htm. 
241 Development Commissioner online information, "Credit Guarantee Fund Scheme for Micro and 
Small Enterprises".  Viewed at:  http ://www.dcmsme.gov.in/schemes/sccrguarn.htm. 
242 Penumaka (2010). 
243 Planning Commission (2006);  and Development Commissioner online information, "List of items 
reserved for exclusive manufacture in micro and small enterprises".  Viewed at:  http://www.dcmsme.gov.in/ 
publications/reserveditems/resvex.htm. India WT/TPR/S/249 
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Table III.25 
Products reserved for MSEs, 2011  
Food and allied industries:  pickles and c hutneys, bread, mustard oil (except solven t extracted), and groundnut oil (except sol vent 
extracted) 
Wood and wood products:  woode n furniture and fixtures 
Paper products:  exercise books and registers 
Other chemicals and chemical products:  wax candles, la undry soap, safety matches, fireworks, and agarbatties 
Glass and ceramics:  glass bangles 
Mechanical engineering, excluding transport equipment:  steel almirah, rolling s hutters, steel chairs (all types), steel tables  (all other 
types), steel furniture (all other types), padlocks, stai nless steel utensils, and domestic utensils (aluminium) 
Source:  Development Commissioner (Ministry of Micro, Small, and Medium Enterprises) online information, "List of 
 items reserved for exclusive manufacture in micro and sm all enterprises".  Viewed a t:  http://www.dcmsme.gov.in/ 
 publications/reserveditems/resvex.htm. 
185. In addition to the set-asides, MSMEs may benefit from a number of other assistance schemes, 
managed by the Ministry  of MSMEs and supporting institutions (e .g. the Office of the Development 
Commissioner and the National Small Industries Cor poration).  These schemes aim to assist MSMEs, 
in particular MSEs, in the promotion and mark eting of exports, product certification, technology 
upgrading, and human resources development (Table AIII.9).  MSEs are also granted a 15% price 
preference for central government purchases (Table A III.9).  The authorities noted that this price 
preference is advisory in nature. 
186. Despite the support they receive, access to cr edit remains difficult for MSEs, as they are 
regarded as high risk by banks.244  According to the Associated Chambers of Commerce and Industry 
(ASSOCHAM), most MSEs operate at some 70% of their capacity due to lack of financial resources.
245  Therefore, one of the Government's prio rities for the development of MSEs is to 
increase the flow of credit/funds from banks and fi nancial institutions.  Hence, within the policy on 
lending to priority sectors, domestic commercial banks are required to reserve 12% of their adjusted 
net bank credit (ANBC) or credit equivalent am ount of off-balance-sheet (OBSE), whichever is 
higher, to MSEs, while foreign banks must reserv e 10%.  Micro enterprises must receive 60% of the 
percentage of ANBC/credit equivalent amount  of OBSE reserved for MSEs (Table III.24).246  Other 
schemes for improved access to credit have also been  implemented (Table AIII.9).  Despite these 
efforts, a study on 12,000 small and medium ente rprises (SMEs) indicated that, on average, 25% of 
their funding comes from banks and financial in stitutions, 15% from internal sources, 10% from 
capital markets, and the remaining 50% from alternative sources (friends and family)247;  92% of 
SMEs remain dependent on personal and family savings.248 
187. At the state level, other schemes also impl emented to support the development of MSMEs 
include:  the development of industrial estates, tax incentives, and subsidies for electricity and 
capital.249  Under the General Excise Exemption Sche me, MSMEs with annual turnover of up to 
                                                      
244 The share of credit to MSEs in  the overall ANBC declined from 12.5% in March 2000 to 10.9% in 
March 2009 (from 7.8% to 4.9% for micro enterprises) (Government of India, 2010). 
245 ASSOCHAM Press Release, "74% of sick SMEs refer their sickness to low fund's availabily", 
11 April 2010.  Viewed at:  http://www.assocham.org/prels/shownews.php?id=2387. 
246 Reserve Bank of India, Master Circular No. RBI/2010-11/79, 1 July 2010. 
247 De (2010). 
248 ASSOCHAM Press Release, "74% of sick SMEs refer their sickness to low fund's availability", 
11 April 2010. 
249 Development Commissioner online information, "SSI Registration".  Viewed at:  
http://www.dcmsme.gov.in/howtosetup/grgxx01x.htm. WT/TPR/S/249 Trade Policy Review 
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US$1 million are granted full excise exemption up to US$375,000250;  MSEs may also benefit from 
excise duty exemptions.251 
188. Despite efforts to assist MSMEs, "sickness" or "incipient sickness" remain a concern.252  
According to the 4th All India Census of MSMEs (2006-07), sickness or incipient sickness among 
registered MSMEs has been due mainly to a lack of demand, shortage of working capital, marketing 
problems, and non-availability of raw materials253;  about 6.49% of register ed MSMEs were identified 
as sick or incipient sick.254  According to ASSOCHAM, 74% of sick  MSEs attributed their sickness to 
a lack of capital.255  The Reserve Bank of India has issu ed guidelines for the rehabilitation of 
potentially viable or viable sick MSEs, mainly th rough the provision of concessionary credit by banks 
and financial institutions.  The concessionary elemen ts of the credits provided include:  subsidized 
interest rates for working capita l loans (and for working capital term loans), of 1.5% below the 
prevailing fixed/prime lending rate;  interest-free credits for loans under the "funded interest term 
loan" modality;  term loans (other than for work ing capital) are granted at a concessional rate of 
maximum 2% below the document rate (3% for tiny/ decentralized small and medium enterprises);  
and contingency/loan assistance is granted at concessional rates of 1.5%  below the prevailing 
fixed/prime lending rate.256 
189. The Government-appointed Task Force on MSME s has recommended a gradual agenda of 
actions in order to provide relief and stability to MSMEs.  Recommendations cover credit, marketing, 
infrastructure, technology, skill developments, and taxation.257  The agenda has not yet been 
implemented. 
(ii) Role of state-owned enterprises (other than state-trading companies), and disinvestment 
190. At end-March 2010, 217 of India's 249 centr al public sector enterprises (CPSEs) were in 
operation (Table AIII.10), 32 were in the process of  being established, and 59 were sick or loss 
making.258  CPSEs continue to play an active role in the economy, holding significant market-share in 
several sectors/subsectors, e.g. petroleum and mi ning, power transmission and generation, nuclear 
energy, heavy engineering, aviation industry, storage and public distribution system, shipping, 
insurance, and telecommunications.259 
191. Since India's last TPR, disinvestment of CPSEs  has continued; a few CPSEs were recently 
approved for disinvestment (Table III.26).  India' s disinvestment policy is aimed at encouraging 
                                                      
250 Development Commissioner (2009). 
251 Development Commissioner online information, "Excise and SSI".  Viewed at:  
http://dcmsme.gov.in/policies/central/t-ed.htm. 
252 A unit is "sick" when:  (i) any of its borr owal account remains substandard for more than 
six months;  or (ii) there is erosion in the net worth due to accumulated cash losses to the extent of 50% of its 
net worth during the previous accounting year;  and (iii) it has been in commercial production for at least two 
years (Reserve Bank of India, Master Circular RBI/2010-11/79, 1 July 2010).  To measure incipient sickness, 
the criterion used is the continuous decline in output fo r three consecutive years, wh ile to measure sickness, the 
criteria utilized are a delay in the prepayment of a loan  of over one year, and a decline in net worth of 50% 
(Ministry of Micro, Small, and Medium Enterprises, 2009). 
253 Ministry of Micro, Small, and Medium Enterprises (2009). 
254 Information provided by the authorities. 
255 ASSOCHAM Press Release, "74% of sick SMEs refer their sickness to low fund's availabily", 
11 April 2010.   
256 Reserve Bank of India, Master Circular RBI/2010-11/79, 1 July 2010. 
257 Government of India (2010). 
258 This excludes seven insurance companies. 
259 Department of Public Enterprises (2010). India WT/TPR/S/249 
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people-ownership of CPSEs while ensuring that th e Government's equity does not fall below 51%, 
hence maintaining control of the enterprise.  The Government approved an action plan for 
disinvestment in profit-making CPSEs in November 2009, which outlines two approaches to disinvestment.
260  First, profit-making CPSEs listed on stoc k exchanges with less than 10% mandatory 
public shareholding will be divest ed through a public offering.  Se cond, unlisted profit-making CPSEs 
will be listed on stock exchanges or will issu e fresh equity or a combination of both.261  Listed 
profit-making CPSEs may use capital markets to finance their capital expenditure and the Government may consider disinves ting part of its shareholding.
262 
Table III.26 
Overview of disinvestment, 2007-11 
CPSEs Scenario Year Government's 
share (%) 
CPSEs disinvested   
Maruti Udyog Ltd.a Sale of the Government's resi dual 10.27% shareholding 2007 0.00 
Power Grid Corporation of India Ltd. 
(PGCIL) Offer for sale of 5% Government's  paid-up capital and issue of 10% 
fresh equity by PGCIL 2007 86.36 
Rural Electrification Corporation 
Ltd. (REC) Offer for sale of 10% Government 's paid-up capital and issue of 
10% fresh equity by REC 
Offer for sale of 5% Government's  paid-up capital and issue of 15% 
fresh equity by REC 2008 
 
 
2010 81.82 
 
 
66.80 
National Hydro-electric Power Corporation Ltd. (NHPC) Offer for sale of 5% Government's  paid-up capital and issue of 15% 
fresh equity by NHPC 2009 86.36 
Oil India Ltd. Issue of 11% fresh paid up capital by Oil India Ltd. through public 
offering; 
Offer for sale of 10% Government's equity to Indian Oil Corporation 
Ltd., Hindustan Petroleum Corporation Ltd., and Bharat Petroleum Corporation Ltd. 2009 78.43 
NTPC Ltd.b Offer for sale of 5% Govern ment's paid-up capital 2010 84.50 
NMDC Ltd.c Offer for sale of 8.38% Govern ment's paid-up capital 2010 90.00 
Satluj Jal Vidyut Nigam Ltd.d Offer for sale of 10.03% Gove rnment's shareholding 2010 64.47 
Engineers India Ltd. Offer for sale of 10% Government's paid-up capital 2010 80.40 
Coal India Ltd. Offer for sale of 10 % Government's paid-up capital 2010 90.00 
Power Grid Corporation of India Ltd. 
(PGCIL) Offer for sale of 10% of Governme nt's paid-up capital and issue of 
10% fresh equity by PGCIL 2010 69.42 
Shipping Corporation of India Ltd. 
(SCI) Offer for sale of 10% of Governme nt's paid-up capital and issue of 
10% fresh equity by SCI 2010 63.75 
Manganese Ore India Ltd. Offer for sale of 10% of Government's paid-up capital;  offer for sale 
of 5% of Maharashtra Government's paid-up capital;  and 5% of Madhya Pradesh Government's paid-up capital 2010 71.57 
CPSEs to be disinvested    
Steel Authority of India Ltd. (SAIL) Offer for sale of 5% of the Government's paid-up capital 2011 76.97 
Hindustan Copper Ltd. (HCL) Offer for sale of 10% Government's paid-up capital and issue of 
10% fresh equity by HCL 2011 81.45 
Indian Oil Corporation Ltd.a Offer for sale of 10% Governme nt's paid-up capital and issue of 
10% fresh equity by the company 2011 62.65 
Oil and Natural Gas Corporation Ltd. Offer for sa le of 5% Government's paid-up capital 2011 69.14 
Table III.26 (cont'd)
                                                      
260 Profit-making CPSEs are enterprises with positiv e net worth, no accumulated losses, and earned net 
profit during the three preceding years;  70% of CPSEs are reported to be profitable (KPMG, 2010a). 
261 Department of Public Enterprises (2010). 
262 Information provided by the Indian authorities. WT/TPR/S/249 Trade Policy Review 
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CPSEs Scenario Year Government's 
share (%) 
Power Finance Corporation Ltd. Offer for sale of 5% of Government's paid up capital and issue of 
15% fresh equity by the Power Finance Corporation Ltd. 2011 73.72 
a Car manufacturing. 
b Power generation 
c Mining exploitation 
d Hydro-power generation. 
Source:  Ministry of Finance (2010), Annual Report 2009-10 .  Viewed at:  http://finmin.nic.in/reports/ 
AnnualReport2009-10.pdf;  Department of Disinvestment online informati on, "Road ahead".  Viewed at:  
http://www.divest.nic.in/road.htm;  and info rmation provided by the Indian authorities. 
192. Proceeds from disinvestment are placed in the National Investment Fund created in 2007;  
75% of the proceeds are allocated to the funding of  selected social programmes and the remainder is 
invested in the modernization or expansion of prof itable or revivable CPSEs.  However, due to the 
economic slowdown (over 2008-09) and a recent dr ought, the Government decided that, over 
April 2009-March 2012, proceeds would be fully used to finance social sector programmes.263 
(iii) Competition policy 
193. Since its last Trade Policy Review, India has made several amendments to its main 
competition policy legislation embodied in the Competition Act 2002.  At present, legislation dealing 
with competition issues in India are the Competition Act 2002, the Competition (Amendment) Act 2007, the Competition (Amendment) Act 2009, and various regulations issued by the Competition 
Commission of India (CCI).
264  Though the Act was passed in 2002, substantive provisions, in 
particular those relating to anti-competitive agreem ents and abuse of dominant position, were brought 
into force only in May 2009265, and more recently (2011) those rela ting to mergers and acquisitions.  
In 2009, the Monopolies and Restrictive Trade Practices Act 1969 (MRTP Act), which had entered 
into force in 1970, was repealed.  The MRTP Commission established under the MRTP Act was to 
continue dealing with the cases filed prior to 1 September 2009 until 2011 (i.e. two years from the 
date of repeal of the MRTP Act)266;  thereafter, the Competition Commission of India (CCI) created 
under the 2002 Act would take on the MRTP Commission's tasks. 
194. The MRTP Act did not meet the needs of India's new economic environment, with a steadily 
growing private sector and the dismantling of state-owned monopolies.  The MRTP Act covered restrictive practices but did not cover abuse of dominance.  In addition, the MRTP Commission was 
restricted to dealing with cases referred to it, it did not have the power of inquiry and there was no 
provision for the Commission to play an active role in promoting competition.
267 
195. The Competition Commission of India (CCI) was established on 14 October 2003268, but 
started operating only in May 2009, when the pr ovisions of the Competition Act relating to 
                                                      
263 Ministry of Finance (2010a) and (2007b). 
264 Competition Commission online information, "Rules and Regulations".  Viewed at:  
http://www.cci.gov.in/index.php?opti on=com_content&task=view&id=19. 
265 Section 1(3) of the Competition Act 2002 empower s the Central Government to bring the various 
provisions of the Act into force on different dates by issuing a notification in Official Gazette . 
266 OECD (2009b). 
267 OECD (2009b). 
268 Department of Company Affairs, Notification S.O.1198(E), 14 October 2003.  Viewed at:  
hpp://www.mca.gov.in/Ministry/ notifications_2003.html.   India WT/TPR/S/249 
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anti-competitive agreements and abuse of dominan t position were notified and entered into force.269  
All cases pending under the MRTP Commission were  moved to the CCI in 2009.  As at 
December 2010, the CCI had received 130 requests for investigations, many inherited from the 
MRTPC, and issued 30 orders.270  The requests covered insurance, travel, automobile manufacturing, 
real estate, pharmaceuticals, the financial sector, and entertainment. 
196. Unlike the MRTPC, the CCI has powers of inquiry and enforcement, and may impose 
penalties for non-compliance with its procedures.271  The Commission may also take remedial actions 
to deal with anti-competitive agreements and a buse of dominant position, and impose penalties of up 
to 10% of the average turnover of an enterprise for the three preceding financial years.  In the case of 
a cartel, the Commission may impose on each member a penalty of up to three times the profit or up 
to 10% of turnover, whichever is higher, for each year of the continuation of the agreement.272  After 
the inquiry, the CCI may issue a cease-and-desist  order directing a delinquent enterprise to 
discontinue and not to re-enter an anti-comp etitive agreement or abuse its dominant position.273  The 
CCI may self-initiate investigations. 
197. The orders, directions or decisions made by the CCI may be appealed before the Competition 
Appellate Tribunal (CAT),  established in October 2009.274  Appeals must be filed within 60 days from 
the date on which a copy of the direction or deci sion or order made by the CCI is received, unless the 
CAT is satisfied that there was sufficient cause for not  filing the appeal within that period.  Orders 
issued by the CAT are enforced in the same ma nner as a decree made by a court;  contravention 
(without any reasonable ground) of any order of the A ppellate Tribunal, may be subject to a fine not 
exceeding Rs 10 million or imprisonment for a term up to three years, or both, as the Chief 
Metropolitan Magistrate (Delhi) may deem fit.275  During 2010, some 25 appeals were filed before the 
CAT and 14 appeals have been disposed of.  A num ber of appeals filed under the MRTPA were also 
being dealt with by the CAT.276 
                                                      
269 Various sections of the Competition Act were notified and entered into force between 2003 and 
2009, through S.O.340(E), 31 March 2003;  S.O.715(E), 19 June 2003;  S.O.1747(E), 12 October 2007;  
S.O.2167(E), 20 December 2007;  and S. O.1242(E) and S.O.1241(E ), 20 May 2009.  As at February 2011, the 
notification of some sections of the Act were pending.  For example, section 5 dealing with the regulation of 
combinations (mergers and acquisitions), had not been notif ied, although section 6 dealing with the same issue, 
was notified in 2007.  Sections dealing with merg ers and acquisitions were notified in March 2011. 
270 CCI online information, "Orders of the Commi ssion".  Viewed at:  http://www.cci.gov.in/ 
index.php?option=com_content&task=view&id=150 
271 These include:  (i) the power to order compensation for loss or damage incurred by contravention of 
its orders;  (ii) a fine of Rs 100,000 per day for failure to  comply with its directions;  (iii) a penalty of up to 1% 
of total turnover or assets, whichever is higher, for failing to furnish information on a combination;  and (iv) a 
fine of Rs 500,000 to Rs 10 million for knowingly making a false statement or omitting any material particular. 
272 Section 46 of the Act empowers the Commission to grant leniency by levying a lesser penalty on a 
member of the cartel who prov ides full, true, and vital information regarding the cartel.  For details of the 
conditions for lesser penalty, see CCI Regulation No. 4 of 2009, 13 August 2009. 
273 Section 33(2) of the Act, introduced in the 2007 am endment, states that where during an inquiry it is 
proved to the satisfaction of the Commission that importation of any goods is likely to contravene specified sections of the Act, it may, by order, grant a temporary injunction restraining any party from importing such 
goods until the conclusion of such inquiry or until further orders, without giving notice to the opposite party. 
274 Ministry of Corporate Affairs, Notification S.O.1240(E), 15 May 2009. 
275 Competition Appellate Tribunal online information, "Introduction".  Viewed at:  
http://compat.nic.in/Introduction.html. 
276 Competition Appellate Tribunal online information, "Cause List".  Viewed at:  http://compat.nic.in/ 
CauseList%20of.html. WT/TPR/S/249 Trade Policy Review 
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198. The CCI has a role in competition advocacy, which the MRTPC did not have.  The 
Commission must take the necessary measures for promoting competition, creating awareness, and 
imparting training on competition issues.277  As part of its advocacy role, the Commission has 
designed the Suggested Framework for Compliance of the Competition Act 2002 by Enterprises.278 
199. The Commission also has powers to inquire into  an anti-competitive agreement or abuse of 
dominant position taking place outside India, if it has,  or is likely to have, an appreciable adverse 
effect on competition in India.  No such cases have been taken to the Commission.279 
200. The CCI must issue an annual report280;  its 2009-10 report was sent to Parliament as required. 
201. Sector-specific regulators exist in many sect ors, such as capital markets, insurance, 
telecommunications, electricity, petroleum and natura l gas, and civil aviation.  According to the 
Competition (Amendment) Act 2007, when any competiti on issue is raised befo re a sector-specific 
regulator, the CCI should give its opinion.  When giving their views, both the CCI, and the sector-specific regulators, should aim to ensure effi ciency and consumer welfare.  Their roles are 
intended to be complementary;  however, there app ear to be conflicts because of the differences in 
interpretation of laws.
281 
202. The Competition Act 2002 contains provisions  dealing with anti-competitive agreements, 
abuse of dominant position, and "c ombinations" (mergers and acqui sitions).  The Act prohibits 
anti-competitive agreements related to production,  storage, purchase or control of goods, and 
provision of services.  These agreements include car tels, price fixing, limiting production, and sharing 
markets or agreements between manufacturers and distributors.282  However, an exception to this 
prohibition applies when these agreements increase efficiency.  There have been no such cases during 
the period under Review.283  The law also recognizes intellectual property rights and in order to 
facilitate their protection, allows reasonable restri ctions imposed by their owners.  While agreements 
related to production, supply, distribution, and control of goods and services for export may have 
appreciable adverse effects on competition, they are exempt from prohibition.284 
203. Abuse of dominant position has been prohibited under the 2002 Act, since the notification of 
the relevant section in May 2009.  Enterprises are prohibited from imposing un fair or discriminatory 
conditions when purchasing or selling goods or services;   or when pricing goods and services.  The 
Act also prohibits other practices including:  restri cting the production of goods and the provision of 
services;  denying market access;  concluding cont racts subject to the acceptance of conditions not 
related to the contract;  and us ing dominant position to enter a market or protect other markets.285  
These practices are not prohibited per se  but are dealt with by "rule of reason" when they cause 
adverse effects. 
                                                      
277 Competition Commission online information.  Viewed at:  www.cci.gov.in. 
278 Competition Commission of India (undated b). 
279 Information provided by the Indian authorities. 
280 Ministry of Corporate Affairs, Notification GSR 808(E), 21 November 2008.  Viewed at:  
http://www.mca.gov.in/Ministry/act sbills/rules/CCI-004_2jan2009.pdf. 
281 Competition Commission online information, "Competition, Public Policy, and Common Man".  
Viewed at:  http://www.cci .gov.in/images/sunday1.pdf. 
282 Competition Act 2002, Chapter II, Section 3.3. 
283 Information provided by the authorities. 
284 Competition Commission online information, "Enforcement Activities Prohibition of 
Anticompetitive Agreements".  Viewed at:  http://www .cci.gov.in/index.php?option=com_content&task=view 
&id=35. 
285 Competition Act 2002, Chapter II, Section 4. India WT/TPR/S/249 
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204. The Act also regulates combinations of large enterprises.  Combinations covered by the 
Competition Act 2002 include mergers and acquisitions involving large enterprises, defined in the Act 
as those above certain thresholds.286  If any enterprises involved in the combination belong to a group, 
the threshold is four times higher.287  Also covered is the category of combinations involving the 
acquisition of control over an enterprise by a pers on who already has direct or indirect control over 
another enterprise producing, distributing or tradin g similar or substitutable goods or services, also 
subject to similar thresholds.  These thresholds are to be revised every two years to reflect movement 
in the wholesale price index (WPI) or exchange rate fluctuations.  In general, mergers or acquisitions 
that are likely to have an adverse effect on competition are illegal in India.  The CCI has not dealt 
with any cases of mergers and acquisitions because th e Central Government had not notified Section 5 
of the 2002 Act dealing with mergers and acquis itions until March 2011, and hence the provisions 
related to them were not in for ce until 1 June 2011.  In addition, the Central Government has made 
some exemptions to the application of Section 5 of the Competition Act 2002 on grounds of public 
interest.  Exemptions apply when the enterprises to be acquired have assets of less than Rs 2.5 billion 
or its turnover is below Rs 7.5 billion or when a "group" exercises less than 50% of voting rights in 
the other enterprise.  
205. According to the law, any person/enterprise, w ho/which proposes to enter into a combination, 
as defined in Section 5 of the Act, must give notice to the Commission.288  However, according to a 
CCI booklet, only combinations that exceed the prescribed threshold must be pre-notified.289  If the 
combination is not notified, the Commission may inquire into it within one year of merger taking 
effect.  If the inquiry finds appreciable adverse effects on competition, the CCI may order the 
dissolution of the merger.  The beneficial and adverse effects of the proposed combination on 
competition in the relevant market in India must be evaluated by the CCI with reference to specific 
factors as stated in the law (Box III.3).  The Commissi on is also authorized to impose a fine of up to 
1% of the total turnover or the assets of the combinat ion, whichever is higher, for failure to notify the 
merger. 
206. The share subscription or financ ing facility or any acquisition, inter alia , by a public financial 
institution, foreign institutional investor, bank or ve nture capital fund, pursuant to any covenant of a 
loan agreement or investment agreement, is exempt  from the notification requirement.  However, the 
institution concerned is required to file details of such transactions to the Commission within seven 
days.290 
                                                      
286 Acquisitions involving large enterprises are those wh ere joint assets amount to over Rs 10 billion or 
turnover amounts to over Rs  30 billion in India;  or, in India a nd abroad, joint assets amount to over 
US$500 million, including at least Rs 5 billion in India, or turnover of over US$1.5 billion, including at least 
Rs 15 billion in India (Competition Act 2002, Section 5(a)). 
287 The term "group" is defined in the Act.  Two ente rprises belong to a group if one is in position to 
exercise at least 26% of vo ting rights or appoint at least 50% of the directors or controls the management or 
affairs in the other;  and if the enterprise resulting from the amalgamation has, in India, a value of more than 
Rs 10 billion or a turnover of more than Rs 30 billion, or aggregate assets in India and abroad valued at more 
than US$500 million or a turnover of more than US$1.5 billion.  That is, a combination is regulated by the law 
if the combined assets of the group to which the amalga mated enterprise belongs to exceed Rs 40 billion or the 
group has a joint turnover of more than Rs 120 billion af ter acquisition or merger.  Si milarly, the law applies to 
combinations of enterprises belonging to a group with co mbined assets outside India of more than US$2 billion, 
including at least Rs 5 billion in India, or a turnover of more than US$6 billion including at least Rs 15 billion in India (Competition Act 2002, Section 5(b)). 
288 Competition Act 2002, Section 6(1). 
289 Competition Commission of India (undated a). 
290 Competition Commission of India (undated a). WT/TPR/S/249 Trade Policy Review 
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Box III.3:  Factors to be considered by the Commissi on while evaluating appreciable adverse effect of 
combinations on competition in the relevant market 
Actual and potential level of competition through imports in the market; 
Extent of barriers to entry into the market; 
Level of concentration in the market;  
Degree of countervailing power in the market; Likelihood that the combination would result in the parties to the combination being able to significantly and 
sustainably increase pri ces or profit margins; 
Extent of effective competition likely to sustain in a market; 
Extent to which substitutes are available or are likely to be available in the market; 
Market share, in the relevant market, or the persons or  enterprise in a combination, individually or as a 
combination; 
Likelihood that the combination would result in the removal of a vigorous and effective competitor(s) in the 
market; 
Nature and extent of vertical integration in the market; 
Possibility of a failing business; 
Nature and extent of innovation; Relative advantage, by way of the contribution to the economic development, by any combination having or 
likely to have appreciable adverse effect on competition; 
Whether the benefits of the combination outweigh the adverse impact of the combination, if any. 
Source:  Competition Act 2002, Section 20, Subsection (4). 
207. The Competition Act 2002 covers all commerc ial activities of government-related bodies.  
However, specific exemptions may be granted on gro unds of security or public interest;  international 
treaty, agreement or convention obligations;  or if  an enterprise is performing a sovereign function on 
behalf of the Central Government or a state government.291  No antitrust exemptions are applicable to 
central public sector undertakings including price or purchase preferences.292  The absence of explicit 
antitrust exemptions is a positive element of the Competition Act, as are the references to the 
Commission's role to foster competition.  Howeve r, the OECD notes that the Act does not impose any 
obligation on any government body to make refe rence to the Commission (for competition fostering 
issues), and the Commission's opinions are non-binding.293 
(iv) Price controls 
208. The Government maintains minimum suppor t prices (MSPs) for major agricultural 
commodities.294  The MSPs and products subject to MSPs are reviewed annually.  MSPs are 
announced prior to each planting season.  India maintaines MSPs for 25 major agricultural 
commodities:  paddy, jowar, bajra, maize, ragi, ar har (tur), moong, urad, cotton, groundnut in shell, 
sunflower seed, soybean, sesamum, niger see d, wheat, barley, gram, masur (lentils), 
rapeseed/mustard, safflower, toria, copr a, de-husked coconut, jute, and tobacco.295  MSPs are fixed by 
                                                      
291 Competition Act 2002, Chapter IX. 
292 Gouri (undated). 
293 OECD (2009b), Chapter 5:  Competition Policy. 
294 A MSP is the price at which the Government  guarantees to purchase from the farmer. 
295 Products subject to MSPs in 2007 were:  paddy, maize, coarse cereals, pulses, cotton, groundnuts, 
sesame, niger seed, wheat, barley, rape seed/mustard, safflower, sunflower se ed, soy bean, toria, copra, jute, 
sugarcane, and tobacco (WTO, 2007). India WT/TPR/S/249 
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the Government following the recommendations of th e Commission for Agricultural Costs and Prices 
(CACP), which takes into account several factors.296  MSPs are the same throughout the country even 
though the cost of production varies according to region. 
209. The Price Support Scheme (PSS) is a procurement system to ensure that farmers of specific 
commodities (e.g. cereals, pulses and oilseeds, cotton and jute) can sell their produce at the MSP;  
designated agencies purchase the produce from farmers at the MSP.297 
210. The Market Intervention Scheme (MIS), in place since 2001, covers agricultural commodities 
that are not covered by MSPs.  The Department of Agriculture and Cooperation implements the MIS 
at the request of state/union territory (UT) govern ments to protect farmers from a price decline when 
there are bumper crops.  In these instances, a market intervention price (MIP) is fixed.   The MIP is set 
taking into account of the cost of production and a "small" margin to support farmers.  The National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and other state-designated 
agencies purchase at this fixed prices and distribute the products.  The authorities noted that the MIS is not used frequently. 
211. Under the Targeted Public Distribution Sy stem (TPDS), a programme that focuses on 
reducing poverty, the price of some essential comm odities, i.e. wheat, rice, coarse grains, sugar and 
kerosene, are subsidized for a targeted populati on living below the poverty line.  These products are 
distributed by the state governments/UTs through the fair price shops and kerosene oil depots.  
According to the authorities, the price for rice and wheat has not been revised since 2002.
298 
212. In 2009, the statutory minimum price (SMP) for sugarcane was replaced by the fair and 
remunerative price (FRP).299  The FRP is fixed by the Central Government on the basis of the 
recommendations of the Commission for Agricultural Costs and Prices (CACP), which consults with the state government and sugar associations.  The main difference between the SMP and the FRP is 
that an additional factor (i.e. a "reasonable" pr ofit margin for sugarcane producers taking into account 
risk) is taken into account when setting the FRP.  The FRP is a minimum price, below which no sugar 
mill may purchase sugarcane from a farmer.
300  State governments also set a state advisory price 
(SAP) for sugarcane.  If the SAP is higher than the FRP set at the central level, the state governments 
have to bear the loss.301 
                                                      
296 Factors taken into account include:  cost of production, changes in price of inputs, input/output price 
parity, market prices, inter-crop price par ity, effect on industrial costs, effect on cost of living, effect on general 
price level and international price. 
297 The Food Corporation of India (FCI) is designated under the PSS to purchase cereals;  the National 
Agricultural Cooperative Marketing Federation of India (NAFED), Central Warehousing Corporation (CWC), 
and National Cooperative Consumer Federation of Indi a Ltd (NCCF) are designated to purchase pulses and 
oilseeds;  the Cotton Corporation of India and NAFED to pu rchase cotton;  and the Jute Corporation of India to 
purchase jute. 
298 The price for wheat remains at Rs 4.15/kg for consumers below poverty line (BPL), and Rs 2/kg for 
Antyodaya Anna Yojana (AAY) (i.e. the poorest of the poor);  and for rice, it is Rs 5.65/kg for BPL and Rs 3/kg 
for AAY (information provided by the authorities). 
299 Sugarcane Control (Amendment) Order 2009. 
300 Other factors taken into account to fix the FRP in clude:  the cost of prod uction of sugarcane; the 
return that growers would have if planting alternative crops;  the general trend of prices of agricultural commodities;  supply of sugar to consumers at a "fair" pr ice;  price of refined suga r (made with sugarcane) at 
the mill;  earnings made from selling by-products (e.g. mola sses, bagasse, and pressed mud);  and a "reasonable" 
profit margin for sugarcane produ cers to also account for risk. 
301 PRS Legislative Research (2009). WT/TPR/S/249 Trade Policy Review 
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213. Traditionally, India operated an administered pricing mechanism (APM) for petroleum 
products, based on the "retention price" concept, under  which oil refineries, oil marketing companies, 
and pipelines were compensated for operating cost s and assured a 12% post-tax return on net worth.302  
Under the APM system, the fixed level of profitabilit y was ensured subject to oil companies achieving 
specified capacity utilization targets.  Upstream co mpanies, i.e. the Oil and Natural Gas Corporation 
Ltd. (ONGC), Oil India Ltd., and GAIL (India) Ltd ., also operate under the retention price concept 
and are assured a fixed return.303  The APM mechanism was, in prin ciple, dismantled in 2002 with the 
objective of introducing market-determined prices  for all petroleum products, except for kerosene 
under the public distribution system (PDS) and lique fied petroleum gas for domestic use (domestic 
LPG).  Domestic retail prices of petrol and diesel were revised in 2003, but not since then.  Although 
the APM was in principle dismantled in 2002, India did not actually end state control over petrol prices at the refinery and retail level until 26 June 2010, and allow them to vary according to 
international prices.
304  For kerosene and LPG, the PDS Kerosene and Domestic LPG Subsidy 
Scheme 2002305 and the Freight Subsidy (For Far-flung Are as) Scheme 2002 were put in place after 
the APM was dismantled.306  These schemes, which were to be phased out by 2008, have been 
extended until 31 March 2014.307  The retail price of diesel is still under control and set according to 
"trade parity".308 
214. At present, a two-price regime system is in place for natural gas:  gas priced under the APM 
and non-APM gas.309  The APM applies to gas produced in fields awarded to India's national oil 
companies (ONGL and OIL) prior to the implementation of the New Exploration Licensing Policy 
(NELP) in 1999.  The non-APM applies to:  (i) g as produced in field awarded under the NELP for 
which the price is determined by the production sh aring contract (PSC) between the Government and 
the private contractor;  and (ii) to imports of liquefied natural gas (LNG) for which the price is 
determined by an agreement between buyer and seller.   The price formula used to determine the prices 
under the PSC must be approved by the Government.  APM gas may only be used by priority sectors, i.e. fertilizers (urea), LPG plants (owned by GAI L and ONGC), power, city gas distribution, steel 
plants, refineries, and petrochemicals.  Other cons umers are not allowed to use subsidized gas and 
must buy it from private companies or LNG importe rs.  The price of gas produced by ONGC and OIL 
under the APM was increased as from June 2010 to US $4.2/mmbtu (less royalty), to bring it on par 
with non-APM gas (i.e. gas produced by NELP operators).  
215. The Government closely monitors the price of  certain hydrocarbons.  In case of high price 
volatility in the international market, the G overnment will intervene to stabilize prices.
310 
                                                      
302 Under this scheme, each unit is awarded an ex-fact ory price based on prescr ibed norms with respect 
to capacity utilization and consumption of inputs.  This ex-f actory price is referred to as the retention price.  The 
post-tax return of 12% on networth is considered as a reasonable return in this scheme.  The difference between 
the retention price and the APM is paid back to the oil company manufacturer as subsidy. 
303 Ministry of Petroleum and Natural Gas online information, "Pricing".  Viewed at:  
http://www.petroleum.nic.in/apppric.htm. 
304 Information provided by the authorities. 
305 PDS Kerosene and Domestic LPG Subsidy Scheme 2002.  Viewed at:  http://ppac.org.in/ 
notifications/A11-03.pdf.   
306 Freight Subsidy (For Far-flung Areas) Sche me 2002.  Viewed at:  http://ppac.org.in/ 
notifications/A10-03.pdf. 
307 Information provided by the authorities. 
308 "Trade parity pricing" is based on the weighted average of import and export prices taking into 
account the inland freight, the marketing margin, the dealers commission,  the excise duty, and the VAT, state 
entry taxes, and local levies (infor mation provided by the authorities). 
309 Information provided by the authorities. 
310 Information provided by the authorities. India WT/TPR/S/249 
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216. The New Pricing Scheme (NPS) for urea, in place since 2003, was initially expected to be 
phased out by 31 March 2010 but it has been extended indefinitely.311  Thus, the price of urea for 
agricultural use continues to be controlled.  However, price controls on other fertilizers 
(e.g. phosphatic and potasiac fertilizers) were elimin ated in 2010 and replaced by a "nutrient-based 
subsidy (NBS) policy", implemented as of 1 Apr il 2010, which applies to phosphatic and potassic 
fertilizers including imports.312  At present, manufacturers/importers fix the retail price and the 
Government provides a fixed annual subsidy based on the nutrient content of the fertilizer produced.  
The subsidy granted to central public sector enterprises (CPSEs) and to private firms producing fertilizers is equivalent. 
217. The Drugs Price Control Order (DPCO) 1995 allows  for the price of drugs to be controlled, 
with the stated purpose of ensuring that quality drugs are available at "reasonable prices".  At present, 
the price of 74 bulk drugs and related formul ations are controlled.  The Department of 
Pharmaceuticals (DoP) administers the DPCO.  The National Pharmaceutical Pricing Authority (NPPA), an independent office attached to the  DoP,  fixes and revises the price of controlled bulk 
drugs and formulations from time to time.   It also monitors the price of decontrolled drugs in order to 
keep them at a reasonable level.  If within one y ear there is an increase in price beyond 10%, the 
NPPA will ask for the price to be reduced.   The price of drugs for "popular use" is controlled when 
drugs are produced under a "monopolistic" situation (i.e. a single formulator has at least 90% of the market shares) and a turnover of at least Rs 10 milli on.  For other drugs, the price may be controlled if 
formulators have a turnover of at least Rs 40 million.
313  The price for bulk scheduled formulations is 
fixed according to the cost of production plus "maximum allowable post-manufacturing expenses" 
(MAPE).314  The MAPE must not exceed 100% of the cost of production for national products, and 
50% of the landed cost for imports.  In respect of imported formulations for which equivalent 
domestic substitutes are available, a 35% margin is  allowed by the NPPA.  Ceiling prices are also 
fixed for commonly marketed formulations.  The cei ling price for commonly marketed standard pack 
size of price controlled formulations is obligat ory for all producers, including small-scale units.315  
The price for bulk "non-scheduled" formulations may be fixed on grounds of "public interest" and 
monitored.316 
218. A new pharma policy was drafted in 2006 but still under consideration. 
                                                      
311 The NPS replaced the retentions  price scheme (RPS) in 2003. 
312 The Nutrient Based Subsidy (NBS) Policy is applicable for muriate of potash (MOP), di ammonium 
phosphate (DAP), mono ammonium phosphate (MAP), triple super phosphate (TSP), single super phosphate 
(SSP), ammonium sulphate, and 16 grades of NPK fertilizers (complex fertilizers containing nitrogen, 
phosphorus, and potash elements together) (Information provided by the authorities). 
313 Genetically engineered drugs produced by r ecombinant DNA Technology and specific cell/tissue 
targeted drug formulations will not be put under price control for the first five years from the date of 
manufacture in India. 
314 "Bulk drug" means any pharmaceu tical, chemical, biological or pl ant product, including its salts, 
esters, stereo-isomers, and derivatives, conforming to pharmacopoeial or other standards specified in the Second 
Schedule to the Drugs and Cosmetics Act 1940, and which is used as such or as an ingredient in any 
formulation.  Scheduled bulk drug means a bulk drug specified in the First Schedule of the Drugs (Prices 
Control) Order 1995.  "Scheduled formulation" means a formulation containing any bulk drug specified in the First Schedule either individually or in combination with other drugs (Medindia online information, "Drug Price 
in India".  Viewed at:  http://www.medindia.net/ buy_n_sell/pharm_industry/ph_drugprice.asp#ixzz1DICK 
GpbB). 
315 National Pharmaceutical Pricing Au thority online information, "Modifi cations in Drug Policy 1986:  
Investment and Pricing".  Viewed at:  http ://www.nppaindia.nic.in/Dp1986mod.htm#present. 
316 Non-scheduled formulation means a formulation not containing any bulk drug specified in the First 
Schedule to the Drugs and Cosmetics Act 1940. WT/TPR/S/249 Trade Policy Review 
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(v) Government procurement317 
(a) Overview 
219. India became an observer to the WTO Ag reement on Government Procurement in 
February 2010.  According to the authorities, re forms to date have moved India towards a more 
transparent and competitive procur ement framework.  India's procur ement system continues to be 
decentralized, comprising an array of entities at vari ous levels of Government (central, state, and 
local) in addition to numerous central public sector  enterprises (CPSEs).  There is no central agency 
responsible for framing policies or regulating public procurement at a national level and no common 
legislation governing procurement at different le vels of government and by  CPSEs.  Consolidated 
data are not available on the economic significance of government procurement, including a 
breakdown of the value of contracts by tendering method. 
220. The authorities consider public procurement as an  important instrument of government policy 
used to obtain certain socio-economic objectives su ch as developing indigenous industries and micro, 
small, and medium-scale industries, uplifting disadvant aged sections of society, developing rural and 
under developed regions, and creating jobs.  As a result, the Central Government has set reservations 
and price preferences as part of the procurement system.318  However, competition from foreign 
suppliers is ordinarily allowed in tenders advertised in India.  If pr ocurement is restricted to domestic 
manufacturers/suppliers, it is clearly in dicated in the tender notification. 
221. Certain control and oversight functions are ca rried out by central authorities, such as the 
Comptroller and Auditor General and the Central Vigilance Commission.  Procurement decisions at 
the central level are still subject to audit by the Co mptroller, and to legislative review and judicial 
scrutiny.  There is a similar system at the state leve l.  The public procurement carried out at state level 
is also subject to audit and oversight by the r espective state vigilance departments, auditors, and 
judiciary.  Some states (Tamil Nadu and Karnat aka) have also passed laws to regulate public 
procurement. 
222. Disputes regarding procurement should be resolved  in the first instance through consultation.  
If the parties fail to resolve the dispute within 21 days , either party may give notice to the other of its 
intention to commence arbitration.  For contracts with domestic suppliers, the applicable arbitration 
procedure is under the Indian Arbitration and Concilia tion Act 1996.  If the contract is with a foreign 
supplier, the supplier may chose arbitration either through the Indian Arbitration and Conciliation Act 
1996 or the United Nations Commission on International Trade Law (UNCITRAL).319  R e m e d i e s  
regarding public procurement contracts may also be sought under the provisions of the Indian 
Contract Act 1872, the Specific Relief Act 1963,  and the Sale of Goods Act 1930.  A public 
procurement process may be subject to judicial re view before a High Court in India on grounds of, 
inter alia , arbitrariness, fairness in action, bad faith or  violation of a fundamental or legal right 
enshrined in the Constitution of India.320 
223. Under India's competition law, collusive biddin g or bid rigging is one of the horizontal 
agreements that is considered to have an adverse effect on competition.  The Competition 
Commission of India (CCI) has the competence to de termine whether collusive bidding or bid rigging 
                                                      
317 This section is based on:  ADB (2006);  Global Legal Group (2010), Chapter 20;  Ministry of 
Finance (2006a);  Ministry of Finance (2006b);  General Financial Rules 2005;  and Indian Government Tenders Information System online information.  Viewed at:  http://www.tenders.gov.in. 
318 Radhakrishnan (2010). 
319 Global Legal Group (2010). 
320 Global Legal Group (2010). India WT/TPR/S/249 
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is anti-competitive.  However, the CCI only makes an  enquiry if there are complaints of an alleged 
contravention.  After the enquiry the CCI might di rect the parties to review the agreement and may 
impose a penalty if it deems necessary (section (iii) above). 
(b) Regulatory framework 
224. India does not have a unified piece of legisla tion regulating government procurement.  The 
regulatory framework for public procurement includes rules, directives, and government orders.  At 
the central procurement level, comprehensive rules and directives have been put in place:  (i) the 
General Financial Rules (GFRs), 2005;  (ii) the Delegation of Financial Powers Rules (DFPR);  
(iii) the Manual on Policies and Procedures for Purchase of Goods  issued by the Ministry of Finance;  
(iv) government orders regarding price or purchase preference or other facilities to sellers in the 
handloom sector, cottage and small scale industries and to CPSEs;  and (v) the guidelines issued by 
the Central Vigilance Commission to increase transp arency and objectivity in public procurement.  
There are also sectoral laws such as the Telecom Regulatory Authority Act 2000, the Electricity Act 2003, and the Petroleum and Natural Gas Board Act 2006, which also regulate public procurement.  
In addition, various government instruments a nd agencies including ministries and departments 
(e.g. the Public Works Department and the Nationa l Highways Authority of India) have their own 
public procurement system.
321 
225. The General Financial Rules (GFRs) 2005, issued by the Ministry of Finance, lay down the 
principles for financial management, and the broad rules and procedures for the procurement of goods 
and services and for contract management (Chapters 6 and 8).  The GFRs and the Manual of Purchase 
Policies and Procedure , also issued by the Ministry, set the guidelines for procurement of goods and 
services at the central level.322  The rules and procedures framed by individual departments are based 
on their perceptions and interpretations of the GFRs and the manual, both of which provide only 
broad guidelines.  In addition, the GFRs and the manual are guidelines with no legal standing and therefore are not enforceable as law.
323 
226. The various ministries or departments have fu ll powers to make their own arrangements for 
the procurement of goods.  However, if they do not  have the required expertise to procure goods, 
procurement may be done through the Directorate General of Supplies and Disposal (DGS&D), the 
central purchase organization, with the approval of the competent authority.324  The DGS&D keeps a 
registry of manufacturers/suppliers and Indian ag ents of foreign manufacturers, and arranges the 
clearance of imported goods purchased by central government departments. 
227. The procurement selection and qualification criteria must be stated in the bidding documents.  
Selection of the winning bidder follows the principle of value for money.  Only the winning bidder is informed of the result of the bid evaluation.  Th e reasons for selecting bidders are recorded but not 
disclosed.  Post-tender negotiations are forbidden but the GFRs allow two exceptions:  post-tender 
negotiations may be conduc ted with the bidder offering the lowest  price, and for ad hoc purchases in 
exceptional circumstances (i.e. there is only one supplier). 
228. The applicable procurement method depends on th e value of the contract to be awarded and 
other factors (e.g. emergency situations) as stipul ated in the GFRs 2005.  The splitting of purchases 
into contracts of smaller value is explicitly forbi dden.  The procurement methods are:  invitation to 
tender;  limited tender enquiry;  single tender e nquiry;  purchase of goods by purchase committee;  
                                                      
321 Global Legal Group (2010). 
322 These rules were overhauled extensively in 2005. 
323 Radhakrishnan (2010). 
324 General Financial Rules 2005. WT/TPR/S/249 Trade Policy Review 
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purchase of goods without quotatio n;  and purchase of goods di rectly under rate contract 
(Table III.27). 
Table III.27 
Government procurement methods, 2011 
Method Description 
Invitation to tender by 
advertisement For procurement of goods of a value of at least Rs 2.5 million, an advertisement must be posted in the Indian 
Trade Journal , in one national daily newspaper of wide circ ulation, and on the website of the tendering 
organization.  The tendering organiza tion should also post the complete bidding documents online.  It may 
issue a global tender enquiry when goods are not available in India and it is necessary to seek suitable offers 
from abroad;  it sends tender notices to Indian embassi es abroad and foreign emba ssies in India, depending on 
the availability of the goods in the sp ecific countries.  Ordinarily, a minimum of three weeks from publication 
of the tender notice or availability of  the bidding documents is allowed for submitting bids, whichever is later.  
Late bids are not considered. 
Limited tender enquiry For procurement of goods of less than  Rs 2.5 million, bidding documents should be sent by speed 
post/registered post/courier/e-mail to registered suppliers.  A direct request from at least three suppliers is 
required.  Goods of a value of over Rs 2.5 million may be procured through limite d tender enquiry when the 
purchase is urgent and there are adequate reasons (i.e. p ublic interest) and justifica tions (e.g. the sources of 
supply are definitely known).a  These grounds are not defined in the Rules but must be documented in writing 
by the procuring entity. 
Single tender enquiry Goods may be procured  from a single source when:  (i) only a particular firm manufactures the goods;  (ii ) the 
goods need to be purchased from a particular source in case of emergency;  and ( iii) for standardization of 
machinery or spare parts to be comp atible with the existing equipment. 
Purchase of goods by 
purchase committee Goods of a value ranging Rs 15,000-Rs 100,000 may be purchased on the recommendations of a local purchase 
committee consisting of three members of an appropriate le vel, as decided by the head of the department.  The 
committee surveys the market to as certain a reasonable rate, quality a nd specifications, and identifies the 
appropriate supplier.b  It must certify that purchased goods are of  the required specification and quality, priced 
at the prevailing market ratec, and that the supplier recommended is reliable and competent to supply the goods 
(General Financial Rules 2005, Rule 146). 
Purchase of goods 
without quotation Goods up to a value of Rs. 15,000 may be purchased wi thout inviting quotations or bids on the basis of a 
certificate to be recorded by the co mpetent authority indicating the satis faction with the good purchased in 
terms of quality, specification, and price (General Fina ncial Rules 2005, Rule 145).  The formal procedure of 
calling for quotations through a tender enquiry is not used. 
Purchase of goods 
directly under rate 
contract Ministries or departments may procure goods through the DGS&D under "rate contract" from suppliers, the 
prices to be paid for such goods can not exceed those stipulated in the rate contract, and the other terms and 
conditions of the purchase should be in line with those specified in the rate contract. 
a Information provided by the authorities. 
b An appropriate supplier is determined by  using the certificates recorded by the me mbers of the purchase committee wherein the y 
must certify that the supplier is reliable and competent. 
c  The prevailing market is identified by  the Committee through a market survey. 
Source:  General Financial Rules 2005;  and informa tion provided by the Indian authorities. 
229. The DGS&D concludes "rate contracts" for goods identified as "common use items" and 
needed on a recurring basis by vari ous central government ministries or departments.  The ministries 
or departments must follow those rate contracts to th e maximum extent possible.  A rate contract is an 
agreement between the purchaser and supplier to s upply stores (i.e. goods) at specified prices during 
the period covered by the contract.  However,  no quantities or minimum purchase requirements are 
mentioned in the contract.  Suppl y orders may be placed with any of the firms holding a "rate 
contract" directly by the authorized officers of the central government ministries/departments or by 
the DGS&D. 
230. "Rate contracts" are concluded by inviting bi ds from suppliers, including foreign suppliers 
and their Indian agents, registered with the DGS&D, the National Small Industries Corporation 
(NSIC), and the Ministry of Defence.  Eligible bidde rs are chosen considering:  (i) the capacity of the 
tendering firm;  (ii) the quantity that the tendering company commits to supply at the prices stipulated 
in the "rate contract";  (iii) the estimated amount  required;  and (iv) a reasonable price range.  
According to the  DGS&D  Annual Report, buying through rate c ontract facilitates procurement of India WT/TPR/S/249 
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quality goods from reliable sources at the most r easonable prices without each department having to 
initiate tenders separately every time a demand arises.325 
231. The DGS&D prepares lists of eligible and cap able suppliers of commonly purchased goods.  
The NSIC also registers micro and small industries (MSEs), under the single point registration 
scheme;  this is considered equivalent to DGS&D  registration. MSEs registered under the scheme are 
exempt from payment of fees related to the issue of the tender and of earnest money and security deposit;  and benefit from the preferences reserved fo r MSEs (see below).  Registration is granted for 
a fixed period depending on the nature of the goods, and may be renewed upon application. 
(c) Preferential policies at the central government level 
232. India retains preferential treatment for micro and small enterprises (MSEs).  At the time of the 
last Review of India in 2007, central public sect or enterprises (CPSEs) were allowed to submit fresh 
bids in response to private sector bids.  For tende rs valued between Rs 50 million and Rs 1 billion, a 
CPSE whose bid was within 10% of that of a la rge private unit was allowed to revise its price 
downward and was eligible for a contract.  This  system was extended until 31 March 2008 and then 
discontinued.
326  However, preferences could be gran ted on a case-by-case basis after an assessment 
of the ministry concerned;  the margins should be CPSE-specific, as required.327 
233. Reservations still exist for MSEs and for certain  products.  MSEs receive purchase and price 
preferences in procurement by central government  ministries/departments and CPSEs.  Under the 
purchase-preference system, 358 items have been reserved for exclusive procurement from MSEs 
(Table AIII.9) and 21 items for exclusive manufacturing in the micro and small sectors 
(section (4)(i)(b)).  The purchase-preference system o ffers price preferences of up to 15% to MSEs 
over the quotations provided by large-scale industries.  MSEs are also assisted through the:  (i) issue 
of tender sets free of cost;  (ii) exemption from payment of "earnest money" (deposits);  and (iii) waiver of security deposits up to the monetary limit for which the unit is eligible, based on certain 
"transparent" criteria (Table AIII.9).  The NSIC serves as a single point of negotiation for eligible 
MSEs for government purchasing preference schemes. 
234. The Central Government has reserved all ite ms of handspun and hand- woven textiles (khadi 
goods) for exclusive purchase from the Khadi and Village Industries Commission (KVIC).  The Central Government purchases all items of handloo m textiles exclusively from the KVIC and/or the 
Association of Corporations and Apex Societies of  Handloom, and coir products from the Coir Board. 
235. In 2007, India issued a five-year policy indicating that the Central Government would 
exclusively purchase certain medicines manufactured by pharma CPSEs and their subsidiaries.  This 
policy is aimed at increasing the market share of the CPSEs and their subsidiaries.
328  The reservation 
applies to a maximum of 102 medicines notified by the Department of Chemic als and Petrochemicals 
from time-to-time.329  The purchasing departments, CPSEs, and autonomous bodies may invite limited 
                                                      
325 Directorate-General of Supp lies and Disposals (2010). 
326 Department of Public Enterprises, Office Memorandum No. DPE/13(15)/2007-Fin, 
21 November 2007.  Viewed at:  http://dpe.nic.in/newgl/glch0612.htm. 
327 Department of Public Enterprises, Office Memorandum No. DPE/13(15)/2007-Fin, 
21 November 2007; and Central Vigilance Commission, Circular No. 31/10/09, 9 November 2009.  Viewed at:  
http://cvc.nic.in/rppp101109.pdf. 
328 Ministry of Chemicals and Fertilizers, Office Memorandum No. 50013/1/2006-SO (PI-IV), 
7 August 2006.  Viewed at:  http://haryanahealth .nic.in/userfiles/file/pdf/guidelines_EDL_RC.pdf. 
329 For a the full list of medicines manufactured by CPSEs and proposed for purchase preference, see 
Ministry of Chemicals and Fertilizer s, Office Memorandum No. 50013/1/2 006-SO (PI-IV), 7 August 2006. WT/TPR/S/249 Trade Policy Review 
Page 110 
  
tenders from pharma CPSEs and their subsidiaries or purchase directly from them at the National 
Pharmaceutical Pricing Authority certified or notifie d price with a discount of up to 35%.  However, 
if no pharma CPSEs can supply these medicines,  the purchasing departments may purchase from 
other manufacturers.  Pharma CPSEs and their s ubsidiaries must comply with the good manufacturing 
practices (GMP) norms stipulated in the Drugs and Cosmetic Rules.330 
236. In addition, certain items pur chased by the Central Government must have the mandatory 
Bureau of Indian Standards (BIS) ISI Marking, and the mandatory Bureau of Energy Efficiency 
(BEE) label star rating.331 
237. Price variation clauses may be included in cont racts where:   (i) major raw materials (e.g  
steel or aluminium) constitute the main component of  the cost;  (ii) the price of the raw material is 
available from CPSEs such as the Steel Authority  of India (SAIL) or the National Aluminium 
Company Ltd. (NALCO);  (iii) there have been "substa ntial" price fluctuations of basic raw materials;  
and (iv) a specific time limit applies for manufactur ing/processing of the product (e.g. 30 days).  In 
these cases, bids must clearly define a price varia tion clause with a base price applicable on a specific 
date.  The base price for calculating the variation is  the price offered by CPSEs such as SAIL or 
NALCO. 
(d) Procurement of services 
238. Ministries or departments may hire external professionals, consultancy firms or consultants 
for a specific job and time frame or outsource certain  services when no one in the ministry/department 
has the required expertise to undertake the task (Rul es 163-164).  Approval of the competent authority 
must be obtained before engaging  consultants.  Certain services (i.e. any service required for the 
functioning of a government office) may also be outsourced in the interest of the economy and efficiency (Rule 178). 
239. The procuring agency, to outsource services, must prepare a tender enquiry containing, 
inter alia :  (i) the details of the work or service to be performed by the contractor;  (ii) the facilities 
and inputs to be provided to the contractor by the ministry or department;  (iii) the eligibility and 
qualification criteria to be met by the contractor;  a nd (iv) the statutory and contractual obligations to 
be complied with by the contractor (Rule 180).   
240. When outsourcing services, a limited tender enquiry is used if the estimated value of the work 
or service is Rs 1 million or less (Table III.27).  Elig ible bidders are in the ministry/department's list 
of potential contractors.  This list is prepared  through formal or informal enquiries with other 
ministries and organizations involved in similar acti vities and research in trade journals.  At least 
three contractors must be identified for issuing a li mited tender enquiry.  If the estimated value of the 
work or service is more than Rs 1 million, an adve rtised tender enquiry must be published in at least 
one popular largely circulated national newspa per and on the Ministry/department's website 
(Rule 181). 
(e) E-government procurement 
241. The DGS&D is mandated to computerize public purchases.  A project on e-government 
procurement under the National e-Governance Plan (N eGP), initiated in 2004, has been in use since 
                                                      
330 News on Projects online inform ation, "Purchase preference polic y for pharma CPSEs' products 
cleared", 5 September 2007.  Viewed at:  http ://newsonprojects.com/story.asp?news_code=2541. 
331 The BIS is India's national standards body. India WT/TPR/S/249 
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2006.332  This reflects the Government's determinat ion to implement electronic tools to ensure 
transparent and competitive procurement processes acr oss all government entities.  According to the 
authorities, e-tendering has facilitated the partic ipation of bidders, increased competition and 
diminished the incentive to create cartels. 
(f) Procurement at the state level 
242. Some states (like Tamil Nadu and Karnataka)  have enacted a law exclusively governing 
public procurement of goods.  However, in most states the general financial rules (GFRs) govern 
procurement and are based on the Central Gove rnment GFRs, which we re updated in 2005. 
(g) Procurement in the railway and other specialized sectors 
243. Procurement in the railway, postal system, tele graph, and defence industries is subject to 
specialized procedures developed by the ministries responsible, within the overall framework of the 
GFRs 2005.  In general, competition from foreign supp liers is allowed in respect of high technology 
or high value items.  For procurement in railways, foreign firms are free to participate in tenders 
advertised in India only, but payment against such contracts must be received in Indian rupees at par with indigenous suppliers.  Globa l tendering is frequently used in procurement of rolling stock, 
wheels, machinery and plant equipment, including technology transfer.  Indian Railways evaluates all 
offers based on the total destination cost.  Domes tic goods bids are evaluated based on freight up to 
destination including all taxes and levies.  Offers from abroad are evaluated based on the c.i.f. value 
of imports and customs duties, but inland freight is not taken into account.  According to the authorities, railway procurement has become more transparent and efficient since the implementation 
of the e-procurement system in 2006. 
244. Procurement by the Ministry of Defence is regulated by the Defence Procurement Procedure 
(Capital Procurement) 2011 (DPP-2011) and the Defence Procurement Manual  (DPM) (Revenue 
Procurement) 2009, as amended.  The DPP-2011 co vers all "capital acquisitions" (except medical 
equipment), purchased by the Ministry of Defence, the Defence Services, and the Indian Coast Guard, 
both in India and abroad.  The procurement of cap ital goods is subject to minimum investment and 
domestic-content requirements de pending upon the procurement me thod (Table III.28).  India's 
defence "offsets" programme requires companies to invest at least 30% of the value of contracts above Rs 3 billion in value in Indian-produced parts, equipment, or services.  Offset obligations must 
be discharged according to the methods outlined in  the DPP with reference to "eligible" products 
and/or services provided by Indian industries (i.e . defence public sector enterprises, the Ordnance 
Factory Board or a private Indian industry).
333  The DPM 2009 contains principles and procedures 
relating to procurement of goods and services for the defence services, organizations, and 
establishments.334  The 2009 manual introduced a system of offsets to require foreigners involved in 
large projects to invest in Indian companies to attain self-reliance.335 
                                                      
332 For details on e-procurement activities, see DGS&D online information.  Viewed at:  
www.dgsnd.gov.in. 
333 Ministry of Defence (2011). 
334 In the DPM, the term "procurement" means acquiring all types of goods (both scaled and 
non-scaled), such as equipment, stores, spares, technical  literature, as well as all types of services, including 
packing, unpacking, and preservation. 
335 Ministry of Defence (2009). WT/TPR/S/249 Trade Policy Review 
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Table III.28 
Capital defence procurement, 2011 
Category Definition 
"Buy" Purchase of equipment 
Buy (Indian) Must have minimum 30% of indigenous content  
Buy (global) Foreign as well as Indian vendors 
"Buy and 
Make"  Purchase from a foreign vendor followed by licensed produc tion/indigenous manufacture in the country.  Offset of 
30% of the estimated cost of the acquisition  
"Buy and Make (Indian)" Purchase from an Indian vendor including an Indian  company forming joint venture/establishing production 
arrangement with the original equi pment manufacturer, followed by license d production/indigenous manufacture in 
the country must have minimum 50%  indigenous content on cost basis 
Source:    Ministry of Defence (2011), Defence Procurement Manual  (Capital Procurement).   Viewed at:  
 http://mod.nic.in/dpm/DPP2011.pdf. 
(vi) Intellectual property rights 
(a) Overview 
245. India is a party to the Convention Establishi ng the World Intellectual Property Organization 
(WIPO) (1975) and to other internatio nal conventions on intellectual property.336  India has signed 
bilateral cooperation MOUs on IPRs with Australia, France, Japan, and Switzerland;  and with the 
European Patent Office, the German Patent Office, the US Patent and Trade marks Office, and WIPO.  
There is also a joint statement of Intent of Bilateral Coopera tion between India and the United 
Kingdom.337  These agreements focus on capacity buildi ng and the creation of public awareness to 
facilitate enforcement of IPRs. 
246. India's WTO contact point for intellectual property purposes is the Department of 
Commerce.338  The institutional and legal framework with  respect to the protection of intellectual 
property rights has not change d substantially since the previous review of India in 2007 (Table III.29).  
The Department of Industrial Policy and Promo tion (DIPP), in the Ministry of Commerce and 
Industry, covers patents, trade marks, designs , and geographical indications, all of which are 
administered by the Office of the Controller General of Patents, Designs, and Trade Marks 
(CGPDTM), except for the provisions related to pate nt revocations and to infringements regarding 
patents, trade marks, designs, and geographical in dications, which are dealt with by the judicial 
authorities.  The departments of Higher Educati on, Information Technology, and Agriculture and 
Cooperation are in charge of copyright protection, protection of layout designs, and the protection of 
new varieties of plants, respectively.339 
                                                      
336 The Paris Convention (Industrial Property), since December 1998;  the Berne Convention (Literary 
and Artistic Works), April 1928;  the Patent Cooperatio n Treaty (PCT) (Patents), December 1998;  the Geneva 
Convention (Unauthorized Duplication of Phonograms), February 1975;  Budapest Treaty (Deposit of Micro-organisms), December 2001;  and the Nairobi Treaty (Olympic Symbol), October 1983 (WIPO online 
information, "Information by country:  India".  Vi ewed at:  http://www.wipo.int/members/en/details.jsp? 
country_id=80&country_code=IN). 
337 Department of Industrial Policy and Promotion online information, "Memorandum of 
Understanding on IPRs".  Viewed a t:  http://dipp.nic.in/index_mou_ipr.htm. 
338 WTO document IP/N/3/Rev.9/Add.3, 16 February 2007. 
339 Department of Industrial Policy and Promotion (2009b). India WT/TPR/S/249 
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Table III.29 
Intellectual property legislation, 2011 
Subject Legislation 
Patents Patents Act, 1970 
Patent Rules 1972 
Repealing and Amending Act 1974 
Delegated Legislation Provisi ons (Amendment) Act 1985 
Patents (Amendment) Act 1999 
Patents (Amendment) Act 2002 
Patent (Amendment) Ordinance 2004 Patent (Amendment) Rules 2005 
Trade marks Trade Marks Act 1999 
Trade Marks Rules 2002 Trade Marks (Amendment) Rules 2010 
Trade Marks (Second Amendment) Rules 2010 
Industrial designs Designs Act 2000, in force since 2001 
Copyright and related rights  
Copyright Copyright Act 1957, as amende d in 1983, 1984, 1992, 1994, and 1999 
Copyright Rules 1958 
Geographical indications Geographical Indica tion of Goods (Registration and Protecti on) Act 1999, in force since September 2003  
Unfair competition Monopolies and Restrictiv e Trade Practices Act 1969, as amended 
Plant variety protection Protection of Pl ant Varieties and Farmers' Rights Act 2 001, entered into force in June 2002 
Source:    WTO Secretariat. 
247. The Intellectual Property Appellate Board (IPAB ) was constituted in 2003 to hear appeals 
against the decisions of the registrar of  trade marks and geographical indications.340  However, as of 
2007 the IPAB has also heard appeals regarding patents.341  All appeals regarding patents that were 
pending before the various high courts, were tran sferred to the IPAB;  and all new Rectification 
Applications under the Patents Act 1970, have since then been filed before the IPAB.342 
(b) Patents 
248. The Patent System in India is governed by the Patents Act 1970 (No. 39 of 1970) as amended 
by the Patents (Amendment) Act 2005, and by th e Patents Rules 2003, as amended by the Patents 
(Amendment) Rules 2006, effective 5 May 2006.  There have been no changes to this legislation since 
the previous Review of India. 
249. Applications for patents may be submitted to the CGPDTM by nationals of any country.  The 
Patent Office, under the Department of Industrial Policy and Promotion (DIPP) at the Ministry of 
Commerce and Industry, performs the statutory duties in connection with the granting of patents.  
There are patent offices in Chennai, Delhi, Kolkata,  and Mumbai that deal with patent applications 
originating within their respective territorial jurisd ictions.  Applicants who are non-resident or have 
no domicile or no place of business in India, mu st employ a patent agent to file the patent 
application.343  The location of the applicant determ ines the appropriate patent office where 
applications for patents should be filed.344 
                                                      
340 Gazette of India , 15 September 2003. 
341 Ministry of Commerce and Industry, Notification No. 12/15/2006-IPR-III, 2 April 2007. 
342 Intellectual Property Appellate Board online information.  Viewed at:  http://www.ipab.tn.nic.in/. 
343 Registered patent agents must be Indian citizens and be at least 21 years old;  they must have a 
degree in science, engineering or technology from any Indian university, and must have passed the qualifying 
examination prescribed for the purpose,  or must have functioned as a patent examiner for at least ten years. 
344 Controller General of Patents, Design, and Trad e Marks online information, "Patents Territorial 
Jurisdiction of Appropriate Office for the Applicants".  Viewed at:  http://ipindia.nic.in/ipr/patent/patents.htm. WT/TPR/S/249 Trade Policy Review 
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250. Patent protection may be granted to any inven tion relating to either a product or process that 
is new, involves an inventive step, and is capable of industrial application (Section 2(1)(j)).  The Act 
also sets out products or processes that are not recognized as inventions and are therefore not patentable.
345  Section 3(d) of the Patent Act refers to  the scope of patentability of pharmaceutical and 
other chemicals and calls for proof of efficacy of the substance.  The claimed substances should differ 
significantly in properties from the known substances with regard to efficacy, which needs to be 
proved at the time of filing or during the patent application to prove inventive step.  Patents of 
addition for an improvement to a patented product can  be granted to the holder of the original patent 
for the same period as the validity of the original patent. 
251. Patent protection is a territorial right.  Hence, for protection to be effective outside the Indian 
territory the applicant must file a corresponding ap plication for the same invention in Convention 
countries346, within 12 months from the filing date in India.  It is also possible to file an international 
application (a Patent Convention Treaty (PCT) applica tion) in India, in any of the different patent 
offices.  In general, it is not necessary to obtain prio r permission from the Patent Office to file a patent 
application abroad, unless:  the applicant is an Indian  resident and the invention originated in India;  
the applicant does not wish to file a patent applicati on in India prior to filing abroad;  the applicant is 
an Indian resident, an application has been filed in  India, and less than six weeks have passed from the 
date of application;  or when  the invention relates to atomic energy or defence purposes. 
252. Applications for patents should be filed before the publication of the invention and should not 
be disclosed or published until then.  Generally, a pa tent application cannot be filed for an invention 
that has been published or publicly displayed.  However the Patents Act provides a grace period of 
12 months for filing a patent applica tion from the date of publication of an invention in a journal or its 
public display in an exhibition organized by the Government, or its disclosure before any learned 
society or published by the applicant.347 
253. A patent application must be examined before the granting of a patent.  Applications are only 
examined if requested by the appli cant or by another interested party within 48 months of the date of 
application, failing which the application is deemed to have been withdrawn.  If all the requirements 
are met, the patent is granted and notified in the Patent Office Journal .  If the application is found to 
be in order for grant, the patent is granted, pr ovided no pre-grant opposition is filed or pending.348 
254. Patent rights accrue from the date of publication of  the patent application, which is within one 
month after completion of 18 months of  its filing or earlier, if requested by the applicant.  On average, 
it takes between 10 and 60 months to grant a pa tent, depending on the information provided by the 
applicant and the opposition the application generat es.  Post-grant opposition may be filed in the 
Patent Office up to 12 months from publication of the grant of the patent in the Patent Office 
Journal .349 
                                                      
345 Patents Act 1970, Sections 3 and 4. 
346 Any country that the Government of India notifies in the Official Gazette  for the fulfilment of a 
treaty, convention or an arrangement,  and which affords to citizens of India similar privileges as are granted to 
its own citizens. 
347 Patents Act 1970, Chapter VI, Sections 29-34. 
348 It is possible to file for pre-grant opposition even before a request for examination has been filed.  
However, it will be considered only if and when a requ est for examination is received within the prescribed 
period. 
349 Pre-grant opposition must be made within four months of publication of the application, while the 
period for post-grant opposition is up to one year.  The grounds for filing post-grant opposition are contained in the Patents Act 1970, Section 25(1). India WT/TPR/S/249 
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255. The term of every patent in India is 20 years fro m the date of filing of the patent application, 
irrespective of whether it is filed with a provisional or  a complete specification.  For applications filed 
under the PCT the term of 20 years begins from the in ternational filing date.  Patent renewal fees are 
payable from the third year onwards. 
256. Compulsory licensing is permitted under certain circumstances.  Anyone interested in 
working a patent may, after the expiry of three y ears from the date of grant of the patent, apply for 
grant of a compulsory licence if:  the reasonable requirements of the public with respect to the 
patented invention have not been satisfied;  the pa tented invention is not available at a reasonably 
affordable price;  or it is not worked in India.350  Two years after a compulsory licence has been 
granted, the Central Government or any interested  person may request the revocation of the patent.  
The Controller (of the Patent Office) must normally make a decision within one year.  No compulsory 
licences have been granted since 2005.351  The Central Government may, if necessary (as in the case 
of a national emergency), provide for the issue of a compulsory licence for a patented product through 
a notification in the Official Gazette  (Section 92) and may use a patented invention for government 
purposes (Section 100).  Compulsory licences are also permitted for exports of patented 
pharmaceutical products in certain  exceptional circumstances352, when the Government declares an 
emergency.  The authorities noted that the Departme nt of Industrial Policy and Promotions has issued 
a discussion paper on compulsory licensing with a vi ew to developing a predictable environment to 
use such measure. 
257. The Act stipulates that parallel imports are allowed when authorized under the law.353  The 
authorities noted that:  "under the law" should be interpreted as the law of the country where the item 
is being produced.  
258. In 2009/10 India granted 6,168 patents;  37,334 patents were in force, of which 6,781 were 
granted to Indians and 30,554 to foreigners resi dent abroad.  As a result of modernization, 
restructuring of offices, and procedural improvements, including a time-limit of three months for examiners to complete examinations once complete  documentation is received, the number of patents 
granted relative to the number of pa tent applications has increased.
354  Patent applications increased 
from 4,824 in 1999/00 to 36,877 in 2008/09;  the number of applications examined rose from 2,824 to 10,296 and the number granted increased from 1,591 to 16,061.
355 
259. The Indian Patent Office has been recognized as an International Searching Authority (ISA) 
and International Preliminary Examining Authority (IPEA) under the PCT. 
260. Contravention of secrecy provisions relating to certain inventions or falsification of any 
information relating to the Patents Register is puni shable by a fine or imprisonment for up to two 
years.  False representation of any article sold in India as being patented in India or for which an 
application has been made is punishable by a fine of up to Rs 100,000.356  Appeals may be made to 
the Appellate Board.  Since 2007, 215 appeals re garding patents have been filed before IPAB. 
                                                      
350 Patents Act 1970, Chapter XVI, Section 84. 
351 Information provided by the authorities. 
352 Patent Act 1970, Section 92A. 
353 Patent Act 1970, Section 107A. 
354 As of 20 July 2007, the Indian Patent Office has put in place an online filing system for patent 
applications.  This facility is also ava ilable for filing trade mark applications. 
355 Department of Industrial Policy and Promotion (2009b). 
356 Patents Act 1970, Chapter XX (penalties). WT/TPR/S/249 Trade Policy Review 
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(c) Trade marks 
261. Trade marks are protected under the Trade Marks Act 1999, and the Trade Marks Rules 2002, 
both in force since September 2003.  In 2009, th e Trade Mark (Amendment) Bill 2009 was introduced 
in Lok Sabha (the lower house of Parliament).357  The Trade Mark (Amendment) Act 2010 was passed 
by both houses of parliament, but is still not in fo rce.  The Act will enter into force once the Trade 
Marks (Amendment) Rules 2010358 , and its amendment  are notified.359  This amendment will enable 
India to accede to the Madrid Protocol.360  Membership of the Protocol will help Indian companies to 
register their trade marks in the Protocol member countries through a single application. 
262. Trade mark law in India is a "first-to-file" syst em that requires no evidence of prior use of the 
mark in commerce.  Any person claiming to be the pr oprietor of a trade mark used or proposed to be 
used in commerce may apply for registration in writi ng or electronically to one of the offices of the 
Trade Marks Registry within their territorial limits.361  A single application may be used for 
registration of a trade mark for different classes of goods and services.  The law protects product, service, certification, and collective trade marks.  Protection is also granted to well known marks, as 
well as service and collective marks.  The Office of Trade Marks does not maintain a register of well 
known marks.  The law stipulates the types of trad e marks that would be refused for registration
.362 
263. As a signatory to the Paris Convention, India recognizes foreign priority provided that the 
application in India is filed within six m onths of filing of the application abroad. 
264. The registration of a trade mark in the Office of the Controller General of Patents, Trade 
Marks, Industrial Designs, and Geogr aphical Indications typically takes about two to three years, 
subject to the trade mark not being opposed by a third party.  A trade mark application may be filed in 
any of the Registry offices in Ahmedabad, Delh i, Chennai, Kolkata or Mumbai, based on the 
territorial jurisdiction.  The steps involved in the registration process in India have not changed during 
the review period.363  Proprietors of trade marks may file a trade mark application only if they have a 
place of business in India, otherwise the application must be filed through a trade mark agent/attorney. 
265. The Trade Marks Office reviews filed applications to ensure that they are complete.  When an 
application for registration of a trade mark has b een accepted, it is published.  Any person may oppose 
the registration, within three months from the date  of its advertisement.  If the trade mark is not 
opposed, the registration will proceed and the Trade Marks Registry will issue a registration certificate.  Where registration of a trade mark is not completed within 12 months from the date of the 
                                                      
357 Trade Marks (Amendment) Bill 2009. 
358 Trade Marks (Amendment) Rules 2010. 
359 Information provided by the authorities. 
360 Trade Marks (Amendment) Rules 2010.  The major change introduced by the Rules 2010 is an 
amendment to the Fourth Schedule of the Trade Mark Rules to allow for the adoption of all 45 international 
classes.  International classes 43, 44, and 45 were merged into class 42 in India until May 2010;  a separate 
application must now be filed for servi ces under these clas ses (Aswal, 2010). 
361 Electronically via the online Trade Marks Registry (Comptroller General of Patents Designs and 
Trade Marks online information, "E-filing of trade mark application".  Viewed at:  http://ipindia.nic.in/tmr_ 
new/default.htm). 
362 These include trade marks that ar e devoid of any distinctive char acter or consist exclusively of 
marks or indications that may serve in trade to designate the kind, quality, quantity, intended purpose, values, 
geographical origin or the time of production of the goods or rendering of the service or other characteristics of the goods or service;  as well as marks or indications that have become customary.  Registration of names of 
chemical elements or international n on-proprietary names is prohibited.   
363 For all the required forms, see Trade Marks Regi stry online information, "The First Schedule".  
Viewed at:  http://ipindia.nic.in/tmr_new/first_schedule_forms/the_first_schedule.htm. India WT/TPR/S/249 
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application, the Registrar after giving notice to th e applicant, treats the application as abandoned.  
Appeals against a decision by the Registrar are ma de to the Intellectual Property Appellate Board 
(IPAB).364 
266. Registration is not necessary to exercise the right over a trade mark, which is also acquired by 
use.  However, registration of a trade mark giv es the owner the exclusive right to the use of the 
registered trade mark and facilitates the seeking of relief in the appropriate courts in case of infringement of the exclusive right.  The exclusive right is subject to any conditions entered on the 
register, such as limitation of area of use.  The Trade Marks Act 1999, preserves common law rights 
in respect of an unregistered trade mark.  Hence, even when a trade mark is unregistered the right 
holder is entitled to protection and may initiate  action against a third party under the law. 
267. Trade marks applications increased from 90,236 in 2001/02 to 130,172 in 2008/09;  and the 
number of trade marks registered increased from 8,010 in 1999/00 to 102,257 trade marks in 
2008/09.
365  As at November 2010, there were approxima tely 400,000 applications pending at various 
stages. 
268. The period of trade mark protection is ten years,  renewable for further periods of ten years on 
payment of the prescribed fee.  A trade mark can be removed from the Register on grounds of non-use 
if the registered mark is not used for a continuous  period of five years and three months from the date 
it was registered, or if the renewal fee is not paid.  Appeals against a decision by the Registrar are made to the IPAB.
366 
269. The Trade Marks Act 1999 provides for both ci vil and criminal remedies.  Penalties for 
falsification of trade marks and selling or providi ng goods that infringe trade marks include a prison 
term of six months to three years, and a fine  of between Rs 50,000 and Rs 200,000.  Second or 
subsequent convictions may lead to imprisonment  for one to three years and a fine of between 
Rs 100,000 and Rs 200,000.  Fal sely representing a trade mark as registered may lead to 
imprisonment for up to three years and/or a fine.  Other penalties include imprisonment for up to two 
years and/or a fine for improper description of a place of business as connected  with the Trade Marks 
Office and for falsification of entries in the Regist er.  If the offence is committed by a company, the 
company as well as every person in charge, and res ponsible to the company would be deemed guilty 
of the offence. 
270. There are also provisions under the trade mark and customs laws that allow Customs to stop 
the importation of infringing goods.  In 2007, the customs authorities promulgated guidelines, under 
which right holders may record their register ed trade marks with the customs authorities.367  These 
guidelines authorize customs officials to seize goods in fringing the trade marks of the right holder at 
the border without a court order.368  According to the authorities, th ere have been no such instances.  
After suspending clearance of suspected goods, the customs authorities inform the right holder, who 
must join in the proceedings against the importe r within the prescribed period, otherwise Customs 
releases the suspended goods.  Cu stoms officers may destroy the susp ended goods or dispose of them 
after it has been determined that the goods have infri nged the trade marks of the right holder, and that 
no legal proceeding is pending in relation to such determination.  Goods amounting to Rs 434 million 
were seized by Customs during May 2007 to March 2010.369  The re-exportation of goods infringing 
                                                      
364 Department of Industrial Policy and Promotion (2009b). 
365 Department of Industrial Policy and Promotion (2009b). 
366 Department of Industrial Policy and Promotion (2009b). 
367 Intellectual Property Rights (Imported Goods) Enforcement Rules 2007. 
368 Customs Notification No. 47/2007, 8 May 2007. 
369 Most recent information availa ble provided by the authorities. WT/TPR/S/249 Trade Policy Review 
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trade marks in an unaltered State is also prohibited.   Under the trade mark law, the police have the 
power to suo moto  conduct raids and seizure operations. 
(d) Industrial designs 
271. The Designs Act 2000 and the Designs Rules 2001 govern industrial designs in India.  The 
Designs Rules 2001 were amended in 2008 to enable e -filing.  India has not yet acceded to the Hague 
System for the International Registration of Industr ial Designs, which gives the owner of an industrial 
design the possibility of protection in several countri es by filing one application in one language with 
the International Bureau of WIPO. 
272. As in the case of patents, India follows the first- to-file system.  To be registered, designs must 
be new or original;  they must not have been discl osed to the public in India or another country by 
publication prior to the filing or priority applicatio n date;  they must be able to be reproduced by 
industrial means;  they must be significantly distinguishable from known designs or combinations of known designs;  they must not comprise or contain s candalous or obscene matter;  must be appealing 
to the eye;  and they must not include anything that is in substance a mere mechanical device. 
273. Proprietors of designs may file for protection in India only if they have a business address in 
the country.  If that is not the case, they may file an application through an attorney or agent.  The 
application may be filed at the patents offi ces in Delhi, Chennai, Kolkata, and Mumbai.
370  A f t e r  
registration of the design, which could take 6 to 12 months, the particulars are entered in the Register 
of Designs and the design is published in the Official Journal of the Patent Office  and made publicly 
available in a Register of Designs. 
274. Registration of an industrial design in India gi ves the proprietor an exclusive right to sell, 
import, and apply it to any article.  Once a design ha s been registered, the article on which the design 
is being used must be marked with the word "reg istered" (or any of its abbreviations REGD or RD) 
along with the design registration number, to inform the public that the right holder has the exclusive 
proprietary right to use it.  If this is not done, the right holder must prove that an infringer was aware 
that he was violating the right holder's exclusive proprietary rights when using the infringing design. 
275. A registered design is protected for ten years fro m the date of registration or from the priority 
date, renewable for five years upon application prior to the expiry of the initial period.  Registration 
provides protection only in India.  From 1999/00 to  2009/10 applications for protection of designs 
increased from 2,874 to 6,092, the number of applica tions examined rose from 2,067 to 6,266, and the 
number of designs registered increased from 1,382 to 6,025.371 
276. The sale, import or imitation of any article in which the design is registered without the 
consent of the registered owner is punishable by a fine  of up to Rs 25,000 to be paid to the registered 
owner together with any other damages incurred of up  to Rs 50,000.  In addition, since 2007, Customs 
officials are authorized to seize and eventually destroy goods infringing the designs of the rights 
holder at the border, without obtaining a court order.372  
277. A design may be cancelled by the Controller Genera l if it is determined that it does not fulfil 
the requirements for registration defined in the Ac t.  Since 2007, 16 registered designs have been 
                                                      
370 For the application form, see Controller General of Patents, Designs, and Trade Marks online 
information, "Designs:  Forms".  View ed at:  http://www.patentoffice.nic.in/. 
371 Department of Industrial Policy and Promotion (2009b). 
372 Intellectual Property Rights (Imported Goods) Enforcement Rules 2007. India WT/TPR/S/249 
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cancelled.  Appeals against a decision by the Co ntroller General may be made to the High Court 
within three months of the decision;  at  present 28 cases are pending in the High Court. 
(e) Copyright 
278. The Copyright Act 1957, most recently amended in 1999, governs the copyright system in 
India.  There have been no changes to this legisl ation since the previous Review of India.  However 
the Copyright (Amendment) Bill 2010 proposing amen dments to the Copyright Act 1957 is being 
discussed in Parliament.  The Copyright Act 1957 gr ants protection to:  original literary, dramatic, 
musical and artistic works;  cinematographic film s;  and sound recordings.  Registration is not 
mandatory.  There is no difference in the copyright pr otection granted to a registered or unregistered 
work.  However, as per Section 48 of the Act, re gistration provides prima facie evidence in case of a 
dispute.  Both published and unpublished works may be registered. 
279. Copyright owners may file an application with the Registrar of Copyrights either in person or 
through a representative;  separate applications  need to be filed for each piece of work.373  After the 
application is filed, and if no objections are raised within 30 days, the Registrar enters the particulars 
of the application in the Register of Copyrights.  In case of a dispute, the Registrar will hold an 
inquiry.  Registration of a copyright takes between 8 to 12 months.   
280. Protection is for the lifetime of the author pl us 60 years for literary, dramatic, musical, and 
artistic works;  and 60 years after the year of publication for anonymous and pseudonymous works, 
photographs, cinematographic films, sound recordings, and  works owned by the Government or by a 
public undertaking or an international organizati on.  Broadcast reproduction rights are for 25 years 
from the year of broadcast, and performers' rights are for 50 years from the date of performance.  
Through the International Copyright Order, copyright is protected in India for nationals of countries 
that are members of the Berne Convention, the Universal Copyright Convention, and the TRIPS 
Agreement. 
281. Copyright may be licensed or assigned to anot her person provided the arrangement has been 
put in writing.  Compulsory licences may be issu ed for works withheld from the public or for 
unpublished "Indian works" where the author is dead or unknown.374  In such cases, applications may 
be made to the Copyright Board, which, after holding an inquiry, may direct the Registrar of Copyright to issue a licence under specified term s and conditions.  Applications for licences to 
publish a translation of a literary or dramatic work  in any language may be made to the Copyright 
Board seven years after publication of the work (thr ee years if the translation is required for teaching, 
scholarship or research) (Article 32).  Parallel impo rts of copyrighted works are not permitted by the 
law. 
282. The copyright law in India provides for both civil and criminal remedies by which the holder 
may enforce their rights.  Infringement of copyright could lead to imprisonment for six months to three years and/or a fine of between Rs 50,000 and Rs 200,000 (Section 63).  Repeated offences are 
punishable by imprisonment for one to three years a nd/or a fine of Rs 100,000 to Rs 200,000.  Any 
person who knowingly makes use of an infringing c opy of a computer program is punishable by 
imprisonment for seven days to three years and/or a fine of Rs 50,000 to Rs 200,000 (Section 63B).  The penalty for making or possessing plates for ma king infringing copies of protected works is 
imprisonment for up to two years and/or a fine (S ection 65).  Publication of a sound recording or a 
                                                      
373 For the forms and other general information, see Copyright Office online information, "Handbook 
of copyright law".  Viewed at:  http://copyright.gov.in/Documents/handbook.html. 
374 "Indian work" is defined as an artistic work by a citizen of India or a cinematographic film or record 
made or manufactured in India (Articles 31 and 31A). WT/TPR/S/249 Trade Policy Review 
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video film in contravention of the Act is punishable  by imprisonment for up to three years and a fine 
(Section 68A).  If any of these offences are committe d by a company, every person who was in charge 
of the company at the time the offence was committ ed, as well as the company, should be deemed to 
be guilty of the offence and be punished accordingly.   
283. Customs officials are authorized to seize at  the border, and if necessary destroy, goods 
infringing copyrights, without obtaining a court order.   In addition, upon an application by the right 
holder, the Registrar of Copyrights conducts an inquiry, and may prohibit the importation of copies 
made outside of India, which if made inside Indi a would infringe the copyrigh t.  In these instances the 
Registrar of Copyright or any person authorized by  him may enter any ship, dock or premises where 
such infringing copies may be found and examine such copies.  From 2007 to February 2011 no such 
applications were received by the Registrar of Co pyrights.  Twenty-four states and UTs have set up 
Copyright Enforcement cells within the crimes se ction of the police, to enforce the copyright 
legislation.  The authorities have indicated that, in 2008 the police registered 6,036 cases regarding copyright violations;  2,151 persons were convicted. 
(f) Geographical indications 
284. Geographical indications are protected unde r the Geographical Indications of Goods 
(Registration and Protection) Act 1999, and the Geog raphical Indications of Goods (Registration and 
Protection) Rules 2002. 
285. Applications for registration of a geographical  indication must be made in writing to the 
Registrar of Geographical Indications.  The Act s tipulates geographical indications that may not be 
registered.
375  Once an application is accepted, the Regist rar advertises the application and if there is 
no opposition the GI is registered.  If the applicati on is not accepted, the grounds for refusal must be 
given in writing.  Decisions by the Registrar may be appealed to the IPAB. 
286. Protection for the owner of the GI and any authorized user is for ten years, but may be 
renewed by the Registrar for further periods of ten years.  Additional protection may be provided by 
the Central Government to certain goods or classes of goods by notification in the Official Gazette .  
At present wines and spirits are the only class of goods that receive higher protection in India.  
Registration guarantees the exclusive use of the GI by  the owner or authorized user and protection in 
case of infringement.  The penalty for falsifying or falsely applying geographi cal indications or selling 
goods under false geographical indicati ons is imprisonment for six months to three years, and a fine of 
Rs 50,000 to Rs 200,000.376  Repeated offences are subject to a prison term between one and 
three years and a fine of Rs 100,000 to Rs 200,000. 
                                                      
375 Geographical indications will not be registered if their use will lik ely deceive or cause confusion, 
would be contrary to any law in for ce, and if they comprise or contain scandalous or obscene matter or any 
matter likely to hurt religious susceptibilities, which would otherwise not be entitled to protection in a court.  In 
addition, GIs determined to be generic names or indicatio ns of goods and therefore not protected in their country 
of origin, or that falsely represent that the goods originate in another country will not be registered. 
376 Infringement is defined under the Act as:  use of the geographical indication to indicate or suggest 
that the goods originate in a geographical area other than the true place of origin in a misleading manner;  use 
that constitutes an act of unfair competition, including passing off;  and use of a geographical indication to 
falsely indicate that the goods are those to which the registered GI relates. India WT/TPR/S/249 
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287. Though the Goods (Registration and Protecti on) Act was enacted in 1999, no GIs were 
registered until 2004 because the Act was not notified until 2003.  By the end of 2009/10, 120 GIs of 
products had been registered repr esenting a wide variety of goods.377 
(g) Plant varieties 
288. Plant varieties are protected in India through th e Protection of Plant Varieties and Farmers' 
Rights Act 2001, and the Rules and Regulations 2006.  Registration of a plant variety gives protection 
only in India and confers upon the right holder, its su ccessor, agent, or license e the exclusive right to 
produce, sell, market, distribute, import, or export the variety.  New varieties may be registered if they 
conform to the following criteria:  novelty, distinctiveness, uniformity, and stability.  A variety that 
has already been on the market but for less than one  year, may be eligible for registration as a new 
variety.  Older varieties may be eligib le for registration as extant varieties. 
289. Registration of a variety is not allowed when it is necessary to prevent commercial 
exploitation of such variety to protect public orde r or public morality or human, animal, and plant life 
and health or to avoid serious  damage to the environment. 
290. Application for registration of a variety is made  to the Registrar-General of Plant Varieties, 
who makes the required enquiries;  once the Registrar deems the application fit,  it is advertised.  If 
there is no opposition, or if the opposition is rejected, the variety is registered in the Plant Varieties 
Registry, and an official certificate is given to the applicant.  Until the Plant Varieties Protection 
Appellate Tribunal is estab lished, a person aggrieved by a decision of the Protection of Plant Varieties 
and Farmers' Rights Authority (established in 2005) or  the Registrar, may file an appeal before the 
IPAB or the High Court.  
291. A certificate of registration is issued for a term of nine years for trees and vines and six years 
for other crops, and is renewable for a maximum of 18 years for trees and vines, or a total of 15 years for extant varieties (from the date of notificati on under the Seeds Act 1966) and other crops (from the 
date of registration of the variety) (Section 24 (6)).   A certificate of registration for a variety confers 
an exclusive right on the breeder or his successor,  his agent or licensee, to produce, sell, market, 
distribute, import or export the variety.  However,  farmers are entitled to sav e, use, sow, resow, 
exchange, share or sell their farm produce, including seed (except "branded seed")
378, of a variety 
protected by the Act.379  Registration may not prevent the use of any variety for conducting 
experiments or research;  or for the purpose of cr eating other varieties.  The authorization of the 
breeder of a registered variety is required if th e repeated use of the variety as a parental line is 
necessary for commercial production of another newly developed variety. 
292. Compulsory licences may be granted after three y ears from the date of registration.  A request 
may be made to the Authority for a compulsory li cence for production, distribution, and sale of the 
seed or other propagating material on the grounds th at the reasonable requirements of the public for 
seeds or other propagating material of the variety have not been satisfied or that the seed or other 
propagating material of the variety is not available to the public at a reasonable price.  The Authority 
will determine the duration of the compulsory li cence on a case-by-case basis but in no event will the 
                                                      
377 These include goods such as Darjeeling tea, Pochampally ikat  and Chanderi sarees, Mysore 
agarbathi, Kullu shawls, Coorg oranges, Aranmula mirrors, and Kancheepuram silk (Department of Industrial Policy and Promotion, 2009b). 
378 "Branded Seed" means any seed put in a package or any other container and labelled in a manner 
indicating that such seed is of a variety protected under this Act. 
379 Farmers' Rights Act, Chapter VI, Section 39. WT/TPR/S/249 Trade Policy Review 
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duration of the licence exceed the total remaining pe riod of protection.  No compulsory licences have 
been granted so far. 
293. The law defines infringement as:  the sale, export, import or production of a protected variety 
without the permission of its breeder or within the scope of a registered licence without the 
permission of the registered licensee or agent;  or  the use, sale, export, import or production of any 
other variety that is given an identical or decep tively similar denomination of a variety registered 
under the Act so as to cause confusion.  In case of an infringement of rights, the right holder may file 
a civil suit in court.  The penalty for applying a fa lse denomination is imprisonment for three months 
to two years and/or a fine of Rs 50,000 to Rs 500, 000.  The penalty for selling varieties to which a 
false denomination is applied is im prisonment for six months to two years and/or a fine of Rs 50,000 
to Rs 500,000.  The penalty for falsely representing a variety as registered is imprisonment for six 
months to three years and/or a fine of Rs 100,00 0 to Rs 500,000.  Repeated offences are liable to 
imprisonment for between one and three years and/or a fine of Rs 200,000 to Rs 2 million.  No cases 
of seizure or infringement have been reported.380 
(h) Semiconductor integrated circuits layout-designs 
294. The Semiconductor Integrated Circuits La yout-Design Act 2000 and the Semiconductor 
Integrated Circuits Layout-Design Rules 2001 is the prevailing law regulating the protection of 
integrated circuits.  However, at present onl y Sections 3 and 5 of the law are in force.381 
295. Layout-designs may not be registered if they ar e not original;  they have been commercially 
exploited anywhere in India or in a Convention countr y;  are not inherently distinctive;  or are not 
inherently capable of being distinguishable from any other registered layout-design.  A creator 
seeking registration of a layout-design must apply in writing to the Registrar.  The Registrar may refuse the application or may accept it fully or subject to amendments.  The Registrar will register the 
layout-design if the application is accepted and not opposed, or if opposed and the opposition is 
decided in favour of the applicant.  Registration is  valid for ten years from the date of filing or the 
date of first commercial exploitatio n anywhere in the world, whicheve r is earlier.  Decisions by the 
Registrar may be appealed to the Layout-Design Appellate Board. 
296. Infringement is defined as the unauthorized re production, whether by incorporating in a 
semiconductor integrated circuit or otherwise, of a registered layout-design or any part of it, or 
unauthorized import, sale, or distribution for commercial purposes of a registered layout-design or an article incorporating a semiconductor integrated circ uit with a registered layout-design.  However, 
reproduction of registered layout-design is permitte d for scientific evaluation, analysis, research or 
teaching.  If, by application of independent inte llect, a person develops a layout-design that is 
identical to a registered one, that person may u se it as desired without infringing.  Infringement of a 
layout-design is considered to be a criminal offenc e in India:  the penalty is imprisonment for up to 
three years and/or a fine of Rs 50,000 to Rs 1 million.  There have been no cases of infringement of 
layout designs during the period under review.
382 
(i) Trade secrets 
297. India has no specific legislation regulating the pr otection of trade secrets;  hence enforcement 
measures/penalties for violations of trade secrets are available through common law.  Trade secrets are protected either through contract law or through the equitable doctrine of breach of confidentiality.  
                                                      
380 Information provided by the authorities. 
381 Information provided by the authorities. 
382 Information provided by the authorities. India WT/TPR/S/249 
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The Indian Contract Act (Section 27) provides some  sort of limited protection as it bars any person 
from disclosing information acquired as a result of a contract.  It is also common to insert a confidentiality clause in a technology transfer or ot her licence agreement to ma intain the confidential 
nature of the subject matter, not only during the em ployment period of the employees and contractors 
but also after its termination, though for a fixed period.
383  Aggrieved parties may seek action through 
the civil courts by obtaining an injunction preventing a third part y from disclosing the trade secrets, 
return of all confidential information and propri etary information, and compensation for any loss 
suffered due to disclosure of trade secrets. 
(j) Enforcement  
298. Since its previous Review, India has take n several initiatives to modernize its IPR 
administration.  The major achievements during the period include an increase in the level of computerization, providing Internet connectivit y amongst the various offices, creating an online 
facility for filing and processing patent and trade ma rk applications, and computerizing intellectual 
property records to create databases.  The Government  has continued its efforts to step up training to 
increase awareness of IPR enforc ement through the National Ins titute of Intellectual Property 
Management (NIIPM).  Since 2007, the NIIPM has undertaken wide-ranging activities including 
training, education, and research.
384 
299. Enforcement of intellectual property rights in  India (except at the borders) is under the 
purview of state governments.  Enforcement is  carri ed out by the police for domestic cases, and by 
the police and Customs for imports and exports.  Under the Customs Act, Customs may seize and 
hold goods for a reasonable period (e.g. six months), including for suspected violations of intellectual 
property rights, following which, the goods must be released or a court injunction obtained to start 
infringement proceedings.  In order to further implement border measures, in 2007 the Customs authorities issued a notification that prohibits im ports of goods infringing intellectual property rights, 
and promulgated the Intellectual Property Righ ts (Imported Goods) Enforcement Rules 2007.
385  
These Rules lay down a detailed procedure for right hol ders or their authorized representatives and for 
Customs to seek suspension of rel ease of suspect imported goods.  The Rules allow right holders to 
record their registered intellectual property, includin g patents, with Customs.  After the grant of the 
registration by the Commissioner on due examination,  imports of allegedly infringing goods into 
India may be prohibited.  The Rules also permit suo moto  action by Customs when infringing goods 
are found through random checks, and the disposal of the confiscated goods;  however, the Rules do 
not call for any action against goods of non-commercial nature contained in pe rsonal baggage,  sent in 
small consignments intended for personal use of the importer, or goods in transit.386  The authorities 
noted that, in 2008/09, there were 23 instances of imports confiscated because of IPR infringement.  In 2009/10 the number of cases increased to 56.   
300. India has made important efforts in the field of  enforcement, such as having specially trained 
IP judges in general courts, training judges on issues specific to IP litigation, and increased efforts by 
Indian customs officials to stop infringing goods from entering the country.  In addition to the Government's efforts to enforce IPR, industries in India have become more proactive.  The Ministry 
of Information and Broadcasting set up a Commi ttee on Piracy, and IPR holders have created 
                                                      
383 De Ranbaxy (2010). 
384 The NIIPM is a central government organization under the Ministry of Commerce and Industry 
engaged in conducting training and awareness programmes relating to IPRs (National Institute for Intellectual 
Property Management online information.  Viewed a t:  http://www.patentoffice.nic.in/niipm/index.htm;  and 
Department of Industrial Policy and Promotion, 2009b). 
385 Customs (non-tariff) Notification No. 47/2007, 8 May 2007. 
386 Intellectual Property Rights (Imported Goods) Enforcement Rules 2007. WT/TPR/S/249 Trade Policy Review 
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associations and IPR committees to generate awaren ess on issues relating to counterfeit, fake, and 
spurious products.  For example, the music and film  industry, through the Film Federation of India, 
Motion Picture Association, and Indi an Music Industry Association, cooperates and collaborates with 
the police in the design and implementation of anti-pi racy programmes.  To support the efforts of the 
industry, the state governments of Andhra Pradesh, Kerala, Maharashtra, and Tamil Nadu, where the 
film and music industry is prominent, have introduced  legislation which stipulating that video piracy 
is an offence.  The aim is that with enhanced c oordination of the industry, enforcement will continue 
to improve.